Editor’s Note: Some of the data contained in this story was incorrect, due to an analysis error by CCM. An updated story on the report can be found here.
Nearly 60% of Connecticut cities and towns increased property taxes this fiscal year, with most of those tax hikes outpacing the rate of inflation, according to a new analysis.
The Connecticut Conference of Municipalities also reported Monday that the property tax burden per capita in this state is nearly twice the U.S. average and third-highest in the nation.
CCM reviewed tax rates in all 169 cities and towns, conducting separate analyses for communities that underwent property revaluation and for those that did not. The process of revaluation, which is periodically required by state law, can lead to lower property tax rates even if owners end up paying more in taxes.
The group found 91 out of 154 municipalities that did not undertake revaluation increased property taxes this year, a ratio of 59%. And of those 91 communities, 70 approved increases greater than 1.6%, topping the latest inflation rate for Connecticut.
“The need for adequate state aid to achieve significant property tax relief — along with other diversified local revenue sources and greater authority to contain local costs — is undeniable,” said CCM Executive Director Joe DeLong. “Nearly 100 towns and cities were forced to increase their property tax rates because of cuts in some state aid programs, and in spite of sustained state aid in others areas for local governments.”
CCM and other municipal advocates have argued for decades that Connecticut’s reliance on the local property tax is undermining economic growth and overburdening low- and middle-income households.
State efforts to reverse this trend also have bogged down , particularly since the last recession, as governors and legislators grapple with surging pension and debt costs accumulated over more than seven decades.
For example, two separate initiatives to share state sales tax receipts with cities and towns haven’t met legislators’ goals. One enacted in 2011 was reversed within two years. A second, adopted in 2015, has been scaled back dramatically.
Education aid for local school districts has increased. For example, the Education Cost Sharing grant is projected to grow by $116 million by the 2020-21 fiscal year.
But over the past decade, key non-education grants that help communities that host large amounts of tax-exempt property — colleges, hospitals and state buildings — have been reduced or have not kept pace with inflation.
Gov. Ned Lamont pledged during the 2018 campaign to expand property tax relief for low- and middle-income households starting with his first budget.
But Lamont deferred the first part of that plan this spring. The governor was supposed make low- and middle-income households without children eligible for a $200 income tax credit that helps offset local property tax costs. Households without children used to receive the credit but lost eligibility in 2018.
Lamont and legislators opted not to restore that tax break and instead closed a projected state budget deficit without increasing income tax rates.
“We share the concerns of the municipalities and their representatives, which is why Governor Lamont continues to seek solutions that will lessen the property tax burden and stabilize municipal finances, just as he did this year when he engaged with local leaders throughout the legislative session,” said Max Reiss, Lamont’s communications director.
Reiss added that “Governor Lamont is always looking to run government in the most effective and efficient way from the state level down the local level,” “With cost-saving efficiencies, such as the centralization of human resources and new Microsoft licensing, we are able to trim the state’s operating costs and maintain support for our municipalities.”
The CCM study also found that local property taxes now generate more than $11 billion per year statewide, an increase of about $500 million since 2017, according to CCM. That’s also slightly more than the $10.8 billion the state income tax raised in 2018.
Norfolk, Bethlehem and Weston were the only communities with double-digit increases, boosting property taxes by 14.5 %, 10.9 % and 10.1 %, respectively.
Thirty-four municipalities kept their tax rates flat while 29 reduced their mill rates.
All but five of the reductions were less than 5%. The largest decline — and the only one in double digits — was Killingly’s 10.1% property tax cut.
“Some enhanced state aid enacted over the last several state legislative sessions has enabled some already high-tax communities to hold the line on property tax increases, or in some towns, to actually reduce taxes,” DeLong said. “Despite this, some communities still have extraordinarily high property tax rates.”
property taxes will continue to go up unless and until the state implements meaningful state/local tax reform which reduces reliance on the property tax and increases reliance on other taxes such as the income tax and the sales tax. the state should also provide meaningful incentives for regionalization.
“It is time to fix the cause, and not the effect.”
Everyone knows the main driver of budgets in most cities and towns, is the cost of education. So, the answer is not alternative, or more tax revenue. It is reigning in the excessive, unjustifiable cost of education in the State of Connecticut. Wake up people, fix the cause and not the effect.
Exactly. And to anyone ignorant of this fact, and who is definitely kept in the dark: Almost every single Public Policy study ever conducted on correlation of beneficial educational outcomes and increase in throwing money on education and its resources shows that the money does NOT have an effect on outcome of students education. Chew on this for awhile – research yourself.
Yes, CT is a high tax state, and government revenues continue to increase.
But consider that the state’s largest employer is the state itself. Then add all the people like teachers who work for municipal government. Include the many people who retire from these jobs and continue to live in the state.
The multiplier can be considered as well. How many people’s jobs are funded entirely or mainly by governments and their employees/retirees?
CT’s economy isn’t growing, and there haven’t been too many net new jobs. If governments were to downsize successfully, there’s a good chance of a one-state recession.
By this time, tax money circulating through CT has become essential. And given current trends, that dependence is going to increase.
it’s way – way – WAY.YY too late. The time to start controlling spending was years and years ago. Thanks CT Democratic Party and Unions (same thing). Tons of houses for sale in my town. The only thing selling are houses costing $250,000 or less. The “bigger/big” houses……people are stuck with them. I know folks in my town that have the $350,000 and up houses that are paying $200 a WEEK ($10,400 annually) in property taxes on their home.