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HB 5174

AN ACT CONCERNING FUNDING FOR THE CITY OF NEW LONDON FOR LOSS OF TAXES ON PRIVATE TAX-EXEMPT PROPERTY.

2026 Regular Session Introduced by Dan Gaiewski and 2 co-sponsors

Connecticut bill proposes state funds to reimburse New London for tax revenue lost due to tax-exempt properties within city limits.

REF. TO JOINT COMM. ON Appropriations
#newlondon #paymentsinlieuoftaxes #unitedstatescoastguard
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Bill Summary · HB 5174

Legislative bill overview

HB 5174 proposes state funding compensation to the City of New London for tax revenue losses resulting from private tax-exempt properties located within the city. Tax-exempt properties (such as those owned by nonprofits, educational institutions, or religious organizations) do not generate local property tax revenue, creating a fiscal burden on municipalities that must still provide services to these properties and their occupants.

Why is this important

Municipalities with significant tax-exempt property holdings face genuine revenue shortfalls while maintaining infrastructure, schools, and emergency services for these properties. New London, like many cities with universities, hospitals, or substantial nonprofit presence, experiences measurable impacts on its tax base. This bill addresses a real tension between supporting tax-exempt institutions and ensuring local government solvency.

Potential points of contention

  • State budget implications: Compensation payments would increase state spending; lawmakers must decide if this is a priority versus other budget needs
  • Precedent and equity: Approving compensation for one city may create expectations from other municipalities with similar situations, expanding long-term state obligations
  • Alternative solutions: Questions about whether negotiated voluntary payments from tax-exempt institutions, increased state education funding, or other mechanisms might be more appropriate than direct municipal compensation

Compiled from official sources — confirm details with the bill’s official record.

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