The PILOT Program: What it is and Why it's Important
More than 200 years ago, Connecticut and the rest of the nation decided not-for-profit hospitals, colleges, and cultural and historical institutions should be exempt from paying property tax. These institutions serve the public good by enhancing the health, education, and general welfare of a state's residents, and exemption from local property taxes provides necessary and important financial support. It allows these institutions to pursue their basic mission of educating and caring for people, and conducting vital research that provides solutions for tomorrow.
The state pays municipalities a payment in lieu of taxes (PILOT) as a partial reimbursement for the money they don't collect because of the tax exemption.
During the 2014 Legislative Session, a bill was proposed that would have eliminated the property tax exemption for not-for-profit hospitals and colleges. The measure, which would have affected students, teachers, doctors, nurses, and patients, did not pass into law.
Hospitals, colleges, and cultural and historical institutions in Connecticut understand the financial strain faced by municipalities but do not believe eliminating the tax exemption is the answer. We believe that increasing state funding of the current PILOT program should be a shared priority of cities and towns, hospitals, colleges, legislators, and the Governor.