Consensus is Growing for Property Tax Relief CCM poised to propose reforms on property tax
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he past 16 months have felt like a lot longer than they normally would have, and while the pandemic changed much, it did not change CCM’s priorities. Primary among them is our over-reliance on the regressive property tax that hampers economic growth and leads to inequities in services. Though delayed somewhat by the pandemic, the CCM Commission on Property Tax Reform will be releasing a report and series of recommendations that can guide our Legislature and State Administration on property tax relief and setting a positive course for our towns and cities and their residents. Connecticut is among the states most reliant on the property tax. Fixing that is a key pre-requisite to making Connecticut more competitive for growth in jobs and prosperity and also delivering and paying for public services more equitably. CCM’s Property Tax Reform report and recommendations are informed by research conducted by national experts in municipal government service delivery, municipal revenue sources, and public pensions. And, it is an important step in a multi-year effort to finally achieve meaningful property tax relief in Connecticut. The goal is “to improve the delivery of local services in a cost-effective and property taxpayer focused manner…and to make towns and cities more economically viable, and more attractive places to call home, work and run a business.” Working with our towns and cities, we intend to present to taxpayers across the state this roadmap that includes recommendations which taken individually and/or together will move our state in the right direction. This initiative builds on the previous work of municipal leaders from across the state, who came together to develop recommendations on the most promising areas for shared services and revenue diversification in CCM’s 2017 report entitled “This Report is Different.” The new summary report is drawn from three comprehensive research studies: 1) a cost containment/shared services study, prepared by the Collins Center for Public Management at UMASS; 2) a revenue diversification study, prepared by the Young Center for State and Local Finance at Georgia State University; and 3) a report on Connecticut’s unfunded public pension liability, prepared by national public pension expert, Gordon Hamlin. As a champion for Connecticut’s towns and cities, CCM knows full well that Connecticut’s over-reliance on the property tax has developed and continued over many decades. In our state, property tax revenue as a percent of total local tax revenue is 98.5% compared to the national average of 72.1%. According to the most recent tax incidence study conducted by Connecticut’s Department of Revenue Services (2014), nearly 45% of ALL taxes paid in Connecticut are property taxes. This 4 | CONNECTICUT TOWN & CITY | MAY 2021
is substantially larger than any other tax and more than the sales tax and the income tax combined according to the most recent tax incidence study for Connecticut. It will take many years to achieve the kind of property tax relief that would enable our towns and cities to move closer to the national average for property tax reliance. With this report, we can provide a roadmap that municipalities can promote and that Connecticut’s taxpayers will support that will help us get to that goal successfully. In the coming months, CCM pledges to work together with our member towns and cities to: 1) continue to emphasize the urgent need for action; 2) promote the recommendations that are the most promising in terms of impact and prospects for adoption at any given time; and 3) keep this initiative moving forward, through ongoing communication, advocacy and convening. This is Connecticut’s Call to Action to finally address three of our most pressing public challenges: 1.
Connecticut’s over-reliance on the property tax, which does harm to our economic competitiveness and the equitable delivery of public services.
2. Connecticut’s fragmented delivery of public services, which often costs more in tax dollars and which can lead to inequitable access to public services. 3. Connecticut’s large public pension liabilities which are consuming more and more of our public resources. When we make real progress in property tax relief, we will strengthen our state’s economic competitiveness and make real strides in equity and fairness in how we deliver and pay for public services. CCM pledges to work in the coming months with leaders in the state’s General Assembly and Administration, as well as community, business and nonprofit leaders who share the same sense of urgency in achieving property tax relief for the people of our state.
