Community Corner

State Budget Cuts Would Hurt Meriden

Elimination of one part of the PILOT program unfairly hurts urban centers, critics say.

Meriden and Middletown would collectively lose $2.7 million in state aid starting next year under Gov. Dannel P. Malloy’s budget proposal.

In Meriden, the city stands to lose $1.1 million in fiscal 2012 from the so-called PILOT program. Middletown would lose $1.6 million. Under PILOT, which stands for payment in lieu of taxes, the state funds towns for properties that are exempt from local taxes.

PILOT includes three categories of tax-exempt properties for which the state reimburses towns; state-owned properties, schools and hospitals, and manufacturing equipment. The state grants manufacturers exemptions from local property taxes for new equipment purchases in an effort to encourage business growth. The state then reimburses the towns and cities for those lost local revenues.

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Under Malloy’s budget plan, the initiative would be cut, eliminating $48 million in local aid statewide. But critics say the plan unfairly penalizes and hurts urban centers where manufacturers largely operate.

“It’s a significant amount of money from our budget,” said Lawrence Kendzior, Meriden’s town manager. “It also causes us a year over year difficulty and it was unexpected. It was not part of Malloy’s campaign platform.”

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To put his city’s $1.1 million proposed revenue cut in perspective, Kendzior said it would help pay for a large portion of the $2.5 million spending increase that the city’s Board of Education is requesting in next year’s education budget.

In Middletown, the $1.6 million PILOT fund cut would also help offset an approximately $2.4 million proposed education budget increase next year, said Mayor Sebastian N. Giuliano.

“We’re the fifth-most impacted community in the state” from the proposed PILOT cut, Giuliano said.

Both Giuliano and Kendzior said they are working with Malloy’s budget officials in the state’s Office of Policy and Management and with the Connecticut Conference of Municipalities, a lobbying and advocacy group for towns that opposes the PILOT cuts.

So far, they said, OPM officials have indicated that they are receptive to finding ways to offset the budget cut.

“They’ve kind of told us they’re going to work with us,” Giuliano said.

The proposed PILOT cuts, he added, would discourage communities from actively trying to lure new businesses or encouraging existing ones to expand.

“You do what the state wants you to do and then they punish you for it,” he said. “This is not what you want to be doing guys.”

 

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