March 5, 2012; Source: Hartford Business Journal

The capital city of Connecticut is the latest in the lineup of municipalities hoping to dip into nonprofit coffers to fill municipal budget holes. In tiny Hartford’s case, that hole is a projected $56.2 million budget abyss. 

The chief operating officer of Hartford, David Pangore, says that the city will soon pitch a payments in lieu of taxes (PILOTs) program targeting large nonprofit property owners. Half of the city’s property is tax-exempt, though a big chunk of that is state government property; the state pays the city about $40 million as a sort of PILOT for its properties. The likely targets of the upcoming city program include Hartford Hospital, St. Francis Hospital and Medical Center, and Trinity College. Because these entities are tax-exempt nonprofits, Pangore imagines appealing to their “better angels” to get them to ante up, though the city would typically have discussions with nonprofit leaders to negotiate a fair and equitable system.

If the city doesn’t find new revenues, the impact could be felt in commercial property taxes, “jeopardize[ing] the city’s efforts to become more business friendly, a top priority of Mayor Pedro Segarra.” 

The hospitals will likely cite their charity care numbers as a major defense against PILOTs, though there remains some question about what even qualifies as charity care. But one can imagine that the debate between the city and Trinity College will be even more interesting. Trinity is located southwest of downtown Hartford, adjacent to a very low income, largely Puerto Rican neighborhood. Trinity doesn’t pay property taxes for its campus, but as a member of the Southside Institutions Neighborhood Alliance, it has engaged in extensive community development activities along with Hartford Hospital and the Institute of Living. Under former president Evan Dobelle, Trinity was a hands-on player in the neighborhood, taking on the development and conversion of a huge abandoned bus garage across from the campus into what is now called the Learning Corridor, part of the college’s $175 million commitment to neighborhood revitalization (the moneys included funding drawn from Trinity’s endowment). 

Some might say that Trinity’s neighborhood generosity was the self-preservation of a university dealing with its location in the midst of a low income, crime-ridden neighborhood. The college that educated Tucker Carlson and George Will had been having trouble recruiting students due to its surroundings. According to one academic observer, “A common anecdote at the time told of a prospective white applicant and her affluent family driving up to the campus, looking around the impoverished neighborhood, and then driving away instead of visiting the Admissions Office.” Dobelle himself said that he wanted to transform the neighborhood from a deficit to an asset.

Still, whether motivated by institutional self-interest or not, Trinity might not take kindly to being hit up for taxes given its huge commitment to improving its surrounding environs. Trinity’s potential defense about its collaborative efforts—with real money on the table—to redevelop its neighborhood setting will make the prospective Hartford PILOTs program one to watch.—Rick Cohen