After getting pushback from some members of his caucus, House Speaker Brendan Sharkey toned down a bill that would allow municipalities to tax certain medical facilities and student housing.
Sharkey was forced to table the bill last week after members objected to making the proposal retroactive. The bill proposed last week would have allowed municipal tax assessors to place medical facilities purchased by nonprofit hospitals and student housing purchased by private universities back on the tax rolls.
The new bill, which passed on an 82-60 vote after midnight, would allow currently tax exempt medical facilities to maintain their tax exempt status. However, if the medical facilities’ owners purchase new property that is on the tax rolls, they won’t be able to take it off the tax rolls.
“It’s frozen in time,” Rep. Michael D’Agostino, D-Hamden, explained during the brief 25-minute debate.
Rep. Jason Perillo, R-Shelton, said he’s concerned the legislation would have a “chilling effect” on a hospital’s decision to purchase medical equipment because that medical equipment would be taxed, if it’s in one of those taxable medical facilities.
This sends “a clear message to hospitals that we don’t want you to be for-profit entities, but we want to tax them as if they are,” Perillo said.
Sharkey disagreed with that characterization.
“These are not your typical small, struggling nonprofits — these colleges and hospitals are very large entities, nearly indistinguishable from traditional private sector businesses, except they don’t pay taxes,” Sharkey said in a press release. “They put a strain on municipal services such as police, fire, and public works, but it’s the host town’s families and businesses that must pick up the tab in the form of higher property taxes.”
Sharkey also pointed to hospitals that have been buying up commercial properties in many towns to use as satellite doctors’ offices and outpatient facilities. Currently these once-taxable properties become tax exempt because of the hospital’s nonprofit status, leaving families and other businesses with higher property taxes to make up the difference.
As for the student housing portion of the legislation, it would put student housing owned by private nonprofit universities back on the tax rolls.
“This is landmark legislation that requires Quinnipiac University and other private colleges to pay property taxes on residential property that they own,” D’Agostino said. “It is only fair to every property owner in Hamden or elsewhere that nonprofits like Quinnipiac pay their fair share of property taxes for police, fire, and other municipal services. I am pleased the House has approved our bill and look forward to passage in the state Senate.”
The legislation is part of the Speaker’s long-term vision to reduce the property tax burden on families and businesses. Local property taxes account for about 40 percent of all taxes levied on Connecticut residents.
The bill now goes to the Senate.