Hartford Business Journal

www.HartfordBusiness.com • July 8, 2019 • Hartford Business Journal 15 SPECIAL REPORT: CITIES PROJECT lege, and one of the nation's wealthi- est, with an endowment of approxi- mately $29 billion. There have been efforts to convince Hartford's "eds and meds" to pony up some cash, but they've resisted. Hart- ford has no voluntary PILOT payments on its books. Somewhat ironically, it's been the private sector that's provided anything akin to voluntary payments. In 2017, Aet- na, Travelers and The Hartford, publicly traded for-profit insurance giants that already rank among the city's largest taxpayers, pledged to donate $50 million to the city over a five-year period to help it deal with its financial problems. Mayor Luke Bronin said he's tried to make inroads with nonprofits. "I believe that our major institutions have a major stake in the strength of the city and I have pushed hard for our hospitals and other large nonprofits to pay voluntary PILOT, and I will con- tinue to do that," Bronin said. The exempt property owned by Hart- ford Hospital, St. Francis Hospital and Medical Center, the University of Hart- ford and Trinity College, all combined, total over $1 billion in assessed value, according to city data. Throw that on the tax rolls and suddenly Hartford would be flush with tens of millions of dollars in additional annual revenue, money that could be used to lower the mill rate or reinvest in the city. By comparison, Hartford's taxable grand list — including real estate, personal property and motor vehicles — is only $4 billion; a slightly higher amount of property is tax exempt. One complicating factor is that the state is already taxing hospitals for its own coffers — to the tune of hun- dreds of millions of dollars annually in recent years. Another is that, while some colleges and hospitals do have endowment funds, all combined, they amount to well under 10 percent of Yale's endowment. In recent interviews, Hartford's largest tax-exempt institutions (some of which own certain taxable, or par- tially taxable properties in Hartford) argued they simply can't afford to pledge any significant revenue to the city's operating budget. In addition, they all pointed to broader economic impacts the city gains from their pres- ence, as well as charitable programs. John Carson, a special ad- viser to Univer- sity of Hartford President Greg Woodward, said the government's policy of not tax- ing nonprofits dates back over a century and it doesn't make sense to look to those institutions for payments now. "The bulk of us are what you would call 'thinly margined, under- capitalized.' We don't have very big endowments," Carson said. As the number of college-age students declines in the coming decade, the situa- tion may only get worse, as higher-ed in- stitutions struggle to find ways to make up projected losses in revenue, he said. "It's just not a model that is going to absorb any of these either voluntary or involuntary payments that some people call for," Carson said. State Rep. Jason Rojas (D-East Hartford), who by day is chief of staff to Trinity College President Joanne Berger- Sweeney, said colleges have limited revenue-raising options, just like the city. Trinity would likely be forced to hike tuition and fees if it had to make a PILOT payment. "We're always willing to have a dis- cussion with the mayor, but [a PILOT payment] is not something we're look- ing to do," Rojas said. "Like any other entity, it would come at the expense of something else." Earlier this year, state lawmakers proposed multiple bills that amounted to mandatory PILOT payments for hospitals. One required hospitals to pay a fee to the state equal to 25 percent of what they would pay in property taxes if they were not tax- exempt, and an- other called for a public safety and infrastructure "benefit charge." In response to those proposals, Hartford Health- Care laid out in written testimony the health system's case against paying a mandatory PILOT payment. Hartford Hospital provides over $126 million in so-called community benefits, through initiatives such as the Brownstone Clinic, which provides medical and dental care for the medi- cally underserved and underinsured, and the Southside Institutions Alli- ance, a partnership with other large, local not-for-profits that focuses on improving the quality of life in south central Hartford. New mandatory fees could put such programs in jeopardy, wrote Barry Kriesberg, Hartford Hospital's region- al vice president for operations. Hartford HealthCare President Jef- frey A. Flaks said Hartford Hospital increasingly aims to be an economic generator for the city and region. He pointed to the hospital's recent in- vestment in a medical-technology accel- erator at Constitution Plaza, its growing collaborations with medical-equipment makers at its Center for Education, Simulation and Innovation facility, and a recent investment in a startup company with an MIT professor. "We feel strongly that health care is an economic engine and that it's part of the solution for really moving our cities and state forward," Flaks said. In a statement, David Bittner, chief financial officer for Trinity Health of New England, which owns St. Francis Hospital, said the regional health sys- tem provided more than $171 million in community benefits last year, including financial assistance for the poor. Boston's PILOT formula Community benefits are part of the equation in Boston's PILOT program, which was revamped under the late Pam Kocher, President, Boston Municipal Research Bureau Hartford HealthCare President Jeffrey Flaks says Hartford Hospital is both an economic generator and force for good. From top: University of Hartford, Trinity College and Yale's Sterling Memorial Library. Continued on next page >> PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED

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