The Day applauds Connecticut College for its $100,000 contribution to New London last week in recognition of the “ongoing and mutually beneficial relationship of the college with the city.” 

College President Katherine Bergeron said she was making the voluntary donation “in recognition of the longstanding partnership” between town and gown. In thanking Bergeron for the donation Mayor Michael Passero was quick to define the gift as “a good-faith payment for this year.” 

Passero’s caveat gets to the heart of the matter. While a $100,000 donation is generous and welcome, both the college and the city would benefit from a more formal, justifiable and predictable services agreement. 

A fee for services in lieu of taxes that municipalities would charge local private colleges and non-profit hospitals is an approach that should be gaining traction in cities across the state.

Connecticut compensates cities for the large tracts of non-taxable property that hospital and college campuses occupy. In 2016, Connecticut College, Mitchell College and Lawrence + Memorial Hospital accounted for about 40 percent of an estimated $860.6 million in non-taxable property in six-square-mile New London. 

The state, through its Payment In Lieu of Taxes (PILOT) program, can reimburse up to 77 percent of the annual tax dollars that would have been generated had the non-profit real estate been taxed at city property tax rates. PILOT is a smart approach that encourages a cooperative partnership between host cities and non-profit organizations. 

However, PILOT payments from Connecticut have declined steadily as the state wrestles with its own intractable budget worries. Reimbursement funding has dropped to only 32 percent. This year, New London received $4.5 million in PILOT funds from the state as reimbursement for the two colleges and the hospital. The city received another $1 million in PILOT funds for the Coast Guard Academy. Those state-provided funds were $170,000 less than in 2017. 

New London had an arrangement with Conn College that resulted in about $100,000 of payments over the 10-year life of the agreement. That expired last year. The city also has a four-year agreement with Mitchell College to pay about $30,000 per year on average through 2020. There is no similar arrangement with the hospital, which is now a part of Yale-New Haven Health. 

That disparity inserts tension and unpredictability in the relationship between the city and the three large non-profits. They are tremendous civic assets and a great source of pride for New London. Each organization contributes greatly to the vitality of the region. Each is a stalwart supporter through volunteer efforts and community contributions. 

And each relies on the city of New London for fire and police protection, public works, road maintenance and traffic control. Those services cost the city money. That money historically had been subsidized largely by the state.

A better way forward is for the Connecticut General Assembly to enable municipalities to impose service fees in lieu of taxes on the private colleges and hospitals. The Connecticut Commission on Fiscal Stability and Economic Growth has proposed this idea. The commission was established by the legislature to develop solutions to the state’s fiscal crisis. 

One way this could work would be for New London to determine the real cost of the services it provides to Mitchell, Conn College and L+M. Those numbers should be quantifiable by reviewing actual department spending over the course of several years. It could be a formidable undertaking, but well worth the effort. 

Once that cost is determined, the city could subtract the dollars it receives as compensation from the state through the PILOT program. The net difference would be apportioned as annual fees among the three non-profits, according to the city services each receives. 

The result would be a balanced fee for city services to the colleges and hospital that is based on actual costs and reimbursements. It would remove the politics, the uncertainty, and the tension of the current haphazard squabbling between the city and its three most prominent non-profit organizations. Statewide, it would hold harmless the cities that deliver those services as state PILOT funds fluctuate from year to year. 

This approach would require an enormous good faith effort from all involved. It also would be advanced greatly if the state passed enabling legislation that would give municipalities the leverage  to mandate such a good faith effort.

The Day editorial board meets with political, business and community leaders to formulate editorial viewpoints. It is composed of President and Publisher Timothy Dwyer, Executive Editor Izaskun E. Larraneta, Owen Poole, copy editor, and Lisa McGinley, retired deputy managing editor. The board operates independently from The Day newsroom.