Proposal would compensate Hampstead for property taxes lost due to state’s hospital purchase

The state’s purchase of Hampstead Hospital last year for a behavioral health campus cost the town of Hampstead nearly $178,000 in annual property taxes. An item before the Executive Council Wednesday would replace that full amount with federal money and revenues from the hospital.

The Department of Health and Human Services received council approval in July to pay Hampstead about $140,000 for lost property taxes. Wednesday, the department will ask the Executive Council to approve paying Hampstead an additional $39,000. The two payments would cover the $177,941 in taxes Hampstead collected from the 95-acre Hampstead Hospital property last year.

The state is not required to pay taxes on property it owns. It instead provides communities payment “in lieu” of taxes. In its request to the Executive Council, the department said it will ask the Legislature to include funding for ongoing payments to Hampstead in the next biennial budget.