Connecticut has required its cities and towns to offer property tax relief to veterans since the latter days of Civil War Reconstruction.
But at some point over time, that relief became far too meager, according to Sen. Cathy Osten, D-Sprague, one of two southeastern Connecticut lawmakers hoping to boost relief up to $2,000 per qualifying veteran.
And with the nation’s population of veterans steadily shrinking, greater tax relief may be essential to ensure military retirees remain in Connecticut, Osten said.
“It’s a respect issue for me, of finally recognizing what men and women do for our country,” the Sprague lawmaker said. “We decided a long time ago that this was something that veterans deserved.”
According to the General Assembly’s Office of Legislative Research, Connecticut first directed municipalities to exempt a portion of property tax for certain veterans in 1875 — two years before the last federal occupation troopers were withdrawn from former Confederate states.
By 1890, according to OLR attorney Jess Schaeffer-Helmecki, the statute exempted $1,000 of a home and land’s assessed valuation from taxation.
But while $1,000 represented 30.2% of the median assessed value back then, according to OLR, it is 0.29% of the current median of $350,000. That translates into very small savings for qualified veterans.
For example, property currently assessed at $350,000 in a town with a tax rate of 30 mills — a mill raises $1 in taxes for every $1,000 of assessed value — would generate $10,500 in revenue.
Reducing that assessment by $1,000 to $349,000 would save the veteran owner $30.
Osten noted that many municipalities voluntarily increase the exemption upward as high as $6,000, but that still generally translates into savings of a few hundred dollars per veteran.
“It’s pennies on the dollar,” said Rep. Anthony Nolan, D-New London, who is working with Osten on the tax relief plan for veterans. “For those who signed up to fight for our country, especially those that are 100% disabled … we need to do a lot better.”
Though the bill Osten and Nolan plan to introduce when the regular 2024 General Assembly session convenes on Feb. 7 is still being developed, the goal is to ensure each qualifying veteran saves about $2,000. This would be comparable to relief already offered to many Connecticut volunteer firefighters and emergency medical technicians.
“How do we make tax breaks for fire and police but not for veterans?” added Nolan, a retired New London police officer.
The existing veterans property tax relief program is open to veterans who served during specific wartime periods, retired after 30 years or more of service, or have qualifying disabilities, according to state law. Osten said her proposal would not adjust these categories.
Tom Moore of Fairfield, department commander for the American Legion in Connecticut, said Osten’s proposal would make a real difference in encouraging veterans to retire in the state. He added that many other states are recognizing the need to provide greater assistance to veterans to help reverse the shrinking numbers of people choosing military service.
According to a 2021 analysis from the Pew Research Center, about 7% of the adult population nationally were veterans, down from 18% in 1980.
“It’s not just what the [federal] government can do for you, but what your local and state government provide for you as well,” he said. “Obviously the better the living situation or taxes are, the more likely a veteran is to stay.”
Connecticut’s largest military presence is centered on its southeastern corner, which includes the U.S. Naval Submarine Base and General Dynamics’ Electric Boat Shipyard, both in Groton.
Osten, an Army veteran who was stationed in Japan during the Vietnam War, added she does anticipate some pushback on the proposal from advocacy groups for cities and towns.
The plan does not include any complementary increase in state aid to help municipalities fund this relief.
Joe DeLong, executive director of the Connecticut Conference of Municipalities, predicted many cities and towns would support this bill — provided the state intends to help communities fund the program.
Without that help, “it’s not a tax break. It’s a tax shift,” DeLong said.
Connecticut already relies much more heavily on a regressive property tax system that disproportionately burdens its middle class to fund public services at the municipal level. If cash-strapped towns must collect less from veterans, that only means they will seek more from other residential property and business owners.
“They are going to have to make up the difference,” DeLong said.
Elizabeth Gara, executive director of the Connecticut Council of Small Towns, offered a similar assessment.
“I don’t think there are any municipal leaders who wouldn’t like to help veterans in their communities,” Gara said, adding that too many towns already have insufficient state aid to cover core programs, particularly education.
“That burden is growing,” she added. “We need to do more to address the property tax burden for all of our taxpayers.”
Osten, who co-chairs the legislature’s Appropriations Committee, noted the state in recent years has approved significant increases both in education and non-education grants to municipalities.
And while state finances are severely constrained by a spending cap, lawmakers already expect to be hard-pressed next year to find more resources for public colleges and universities, nonprofit agencies that deliver the bulk of Connecticut’s social services, and other health care initiatives.
The co-chairs of the tax-writing Finance, Revenue and Bonding Committee said that while they would certainly review the proposal once it’s filed next February, the growing pressure on all of Connecticut’s property taxpayers is a big concern.
Sen. John Fonfara, D-Hartford, one of the legislature’s most vocal advocates for reducing reliance on property taxes, says the current system has locked huge pockets of poverty in Connecticut’s urban centers. “It’s so anti-growth, so anti-business,” he said.
Rep. Maria Horn, D-Salisbury, said, “I’ll always look at everything and think about it, and obviously helping veterans is something we should always be looking at doing.”
But she added that lawmakers also have to be careful not to exacerbate property tax burdens that are pushing people out of homes and businesses, especially in economically challenged communities.