A bill touted by House Speaker Brendan Sharkey that would put student housing and new medical facilities acquired by large hospital networks on the tax rolls for the first time was one of the many concepts buried in a special session budget bill last week.
Its passage means that, as of October 2015, municipalities can levy property taxes on any student housing that’s not considered a dormitory and any new medical facility acquired by a hospital network that netted patient revenue of $1.5 billion as of 2013.
“The affected private colleges and large hospitals are not your typical small, struggling non-profits — they are large entities, nearly indistinguishable from traditional private sector businesses, except they don’t pay property taxes,” Sharkey said Wednesday in a statement. “They put a strain on municipal services, but it’s the host town’s families and businesses that must pick up the tab in the form of higher property taxes. Under this new law, hard-working families and local businesses will see property tax relief.”
But the Connecticut Hospital Association doesn’t exactly see it that way.
“Because they have a long tradition of providing free charitable care to those in need 24 hours a day, a critical service that government doesn’t provide, hospitals were granted a property tax exemption,” Michele Sharp, a spokeswoman for the association said. “That exemption is earned every day by Connecticut hospitals. No matter how large and complex these organizations become, the fundamental proposition remains that all Connecticut hospitals provide healthcare to people in need during emergencies and disasters, whether they can afford it or not. It is for this reason that they merit exemption from local property taxes.”
Earlier this year, Sharkey struggled to get the legislation through the House and the Senate. The measure was tabled in May when members in the House objected to making the legislation retroactive. It was approved by the House later on an 82-60 vote after the retroactive language was stripped from the bill. It was then sent to the Senate where it died on the calendar on the last night of the regular legislative session after an amendment was introduced to eliminate medical facilities from the bill.
Republican Senate Leader Len Fasano, R-North Haven, said he doesn’t necessarily have a problem with taxing off-site student housing, but hospital facilities have always been something that wasn’t taxed “and I think that’s a significant change.”
Fasano, like all the Republicans in the General Assembly, voted against the budget implementer bill that included the language.
The impetus for the language is related to tension between Quinnipiac University and Sharkey’s hometown of Hamden where the private, non-profit university is located.
The conflict between the university and neighbors 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 was H.B. 6965, An Act Concerning The Preservation Of Municipal Tax Bases, which was revived as part of the budget language adopted during the June 29 special session.
In terms of the language regarding hospital facilities, only the Yale-New Haven Hospital and Hartford Hospital networks will be impacted by the legislation.
The seven educational institutions exempted from the legislation are Connecticut College for Women, the Hartford Seminary Foundation, Trinity College, Wesleyan University, Yale University, and the Berkeley Divinity and Sheffield Scientific schools, which are part of Yale.