Early Friday morning the House of Representatives briefly debated — but took no action on — legislation that would put certain medical facilities and college properties back on the tax rolls.
The bill is one of House Speaker Brendan Sharkey’s top priorities this year, but some lawmakers wanted more information about the strike-all amendment that was introduced just before midnight Thursday.
Lawmakers are expected to take it up again next week.
The bill, which was brought out by Rep. Michael D’Agostino, D-Hamden, would have allowed medical facilities purchased by tax-exempt hospitals to go back onto the local property tax rolls. The nonprofit hospitals would remain tax exempt.
The bill also tackled the thorny town vs. gown issue and would move any student housing purchased by most universities back onto the tax rolls. Yale University, Wesleyan University, and Trinity College would remain exempt based on a long-standing compact with the state.
“What we want to disincentivize is the purchasing up of residential neighborhoods for use as student housing,” D’Agostino said.
The tension between Quinnipiac University in Hamden and its purchase of homes in residential neighborhoods bubbled to the surface this year when Quinnipiac University President John Lahey was videotaped attending an off-campus party and commenting that he didn’t even “know this street existed.” He also said, “I’m going to have to buy all these houses.” The video went viral.
The comments infuriated Hamden residents and elected officials including Sharkey, who responded with an editorial in the New Haven Register.
“No Hamden family wants to pay higher property taxes because, as a non-profit, Quinnipiac doesn’t pay their fair share of property taxes for single-family residential homes bought to house students,” Sharkey wrote.
Sharkey’s solution to the situation is H.B. 6965, An Act Concerning The Preservation Of Municipal Tax Bases, which was tabled after about 30 minutes of debate Friday morning.
A spokesman for Sharkey said lawmakers just needed a little bit more time to understand the strike-all amendment.
The objections from some Republican lawmakers Friday morning were related more to the hospital portion of the bill.
Rep. Jason Perillo, R-Shelton, said the hospitals purchased these medical facilities with the understanding that they would not be taxable. He said that was worked into their business plan because in 2009 the legislature told them they weren’t going to be taxed.
“Here we are, changing the rules,” Perillo said. “They made a business decision . . . now we are changing the rules. Not small impacts, hundreds of thousands and in some cases millions of dollars of impact.”
Perillo said those costs would have an impact on the delivery of care because the direction of care under the Affordable Care Act calls for more collaboration. He said that drives hospitals to grow their networks by purchasing these medical facilities.
He said Sharkey’s legislation disincentivizes that type of collaboration.
Rep. Dan Carter, R-Bethel, said he understands why municipalities don’t want colleges taking residential real estate off their Grand List, but the reason for the hospital part “is nothing more than giving us more money to spend.”
He said the budget already seeks to tax hospitals to give the state more money to spend, and now this bill would take even more money out of their pocket.
H.B. 6965 is expected to be raised again next week after lawmakers have some time to better understand the amendment.