Property Tax Working Group

For the 2023 General Assembly, I can think of no better New Year’s resolution than to finally reform Connecticut’s unfair, inefficient and burdensome property tax system.

Reform, not relief. Relief amounts to the adjustments and changes that occur from time to time — most of which, like those that were adopted during the 2022 legislative session with the PILOT program and the car tax, are positive — but they are not reform.

The Property Tax Working Group of 1,000 Friends of Connecticut, of which I am a member, has recently updated a comprehensive report on property tax reform — “Property Tax Reform: If Not Now When?” A major point in the report is that with the state’s unprecedented budget surplus, this is exactly the time to undertake fundamental reform through a rebalancing of the current system.

Rebalancing means reducing the burden of property taxes by changing the structure of the state-local fiscal relationship so that municipalities need to rely less on property taxes to fund essential needs. Our reform proposals would result in a reduction in property taxes for the vast majority of taxpayers and a fundamental rebalancing of the current system.

Connecticut consistently ranks in the top five property tax-dependent states in the nation. Moreover, our current system suffers from fundamental flaws that result in unneeded competition and fragmented service delivery between towns, flawed land use decisions, environmental compromises and a lack of equity that exacerbates economic, educational and racial divides.

Reform means that Connecticut must change a system where owners of property with similar values are taxed at different rates depending on which town they live in, and owners paying similar tax rates receive widely disparate services. In addition, low- and moderate-income households are subjected to far higher effective property tax rates than high-income households.

We further need to correct the needs-capacity gap for our municipalities and the cost-capacity gap for our schools. In both cases, it’s a question of a town’s ability to provide the general government operating costs and educational services that most people expect with the one revenue resource they have at their disposal — the property tax.

Making minor modifications to the state’s revenue stream while ignoring the failings in the property tax system is likely to undermine economic growth, worsen financial conditions and do nothing to lessen the fragmentation in the delivery of services. Rebalancing our tax system and ending our over-reliance on the property tax will encourage a robust economy fueled by increased demand for goods and services by low- and moderate-income families; effective local government; strong communities; quality education; and a healthy environment.

If Connecticut fails to address this all-important issue now — during a period of soaring budget surpluses — will it ever happen? Not likely.

John Filchak is Executive Director of the Northeastern Connecticut Council of Governments and a member of the Tax Policy Collaborative.