New London — The Democratic leaders of the state Senate hosted a town hall-style forum Thursday evening to discuss legislation supporters say would make taxation and distribution of state funding more fair for New London and other urban centers.

Senate Bill 1, or “An Act Concerning Tax Fairness and Economic Development,” would restructure how state payments in lieu of taxes (PILOT) funding is distributed to cities and towns, and establish a statewide uniform tax rate for motor vehicles, among other measures.

Senate President Pro Tempore Martin Looney, D-New Haven, and Senate Majority Leader Bob Duff, D-Norwalk, the bill’s co-sponsors, joined Mayor Daryl Justin Finizio at the Public Library of New London to explain the legislation to taxpayers and respond to questions or concerns.

Under the existing PILOT formula, municipalities are reimbursed 32 percent of what the taxes would be on a college or a hospital and 24 percent of what the taxes would be on state-owned property.

Senate Bill 1 would create a tiered system whereby municipalities with more tax-exempt property would be reimbursed at higher levels than municipalities with few tax-exempt properties.

For colleges and hospitals, municipalities would be reimbursed at either the 42, 37 or the current 32 percent levels, based on the amount of tax-exempt property. For state-owned property, municipalities would be reimbursed at the 32, 28 or the current 24 percent levels.

“It is something that we believe is a refinement on a program that has been in place for 35 years but has not until now taken into account the degree of need, and the fact that so many communities are operating in a system where they are relying upon a local property tax base that is significantly hampered by having so much tax-exempt property located within that community,” Looney said.

In a city like New London, where 46 percent of the land is tax-exempt, reform to the PILOT program would mean an increase in revenue from the state and could ease the burden shouldered by property owners, Finizio said.

“Our local taxpayers have agreed to pay their share, in recent years approving local budgets and tax increase by margins of two to one,” the mayor, who has testified before the legislature in favor of PILOT reform, said. “So we’re willing to put in what we need to put in, but we need help from the state in order for our city to grow.”

City Councilor Michael Passero, who is also running for mayor, attended Thursday’s forum and said he thinks it is time for meaningful PILOT reform.

“It sounds like something that would be beneficial for New London,” he said. “I’m hoping the state will be able to give us urban centers more relief because in many cases it's the urban centers addressing the core of social needs of the region.”

Passero said, though, that he is not entirely sold on the provision in Senate Bill 1 to establish a statewide mill rate for the car tax.

Proposed changes to the car tax would entail the state collecting vehicle taxes then distributing them to towns based on a formula that would take into account the 2014 grand list, town population, PILOT amounts and poverty levels, according to a Connecticut Conference of Municipalities summary of the bill.

Members of New London’s delegation to the General Assembly have voiced their support for all or parts of the bill, which has been advanced to the Committee on Finance, Revenue and Bonding and will be studied further as the legislative session continues.

c.young@theday.com

Twitter: @ColinAYoung