The good thing about property taxes is that they are relatively stable. As part of an overall revenue structure, which is relatively balanced among taxes on property, sales and income, they make sense. But when a state relies excessively on local property taxes to fund governmental services, as does Connecticut, it’s reasonable to begin working to fix what House Speaker Brendan Sharkey has termed a “broken” tax system.
Even municipalities that appear to benefit from the current system will find that it is detrimental in the long run. Driven by over-reliance on the property tax, planning commissions and zoning boards make decisions based on what members think (often incorrectly) will increase property tax revenues. Although short-term revenue growth may occur, the need for new roads, new schools and new sewers to support new development can increase long-term costs, saddling towns with unsustainable obligations to build and maintain that infrastructure. Moreover, agricultural and open space land is often sacrificed on the altar of development. Study after study demonstrate that development requires more in service demands than they pay in property taxes than undeveloped open spaces.
From a regional or statewide perspective, already amortized infrastructure investment in other towns is wasted. Schools in some towns stand empty while an adjacent town builds new buildings. As long as they must raise the bulk of their revenue by property taxes from within their own borders, towns are discouraged from thinking beyond those arbitrarily established lines when making land use decisions, no matter how much sense regional solutions would make to the environment or the economy.
Inevitably, towns turn to the state to subsidize part of their additional infrastructure costs, putting additional strains on the state’s budget and diverting state support from where it is most needed. State debt service on bonds for new school construction crowds out the potential for the state to pay the excess costs of special education or to support early childhood education.
Alternatively, since fiscal support for additional public school children is an expensive challenge for towns and their property tax reliant revenue streams, an “anti-kid” attitude has evolved. Towns try to discourage young families by making planning and zoning decisions that “zone out” families that they (often incorrectly) believe will cause an increase in student population.But young families are critical to the economic and social well-being of any town. Where will the volunteer Fire and EMS persons come from?
So for the benefit of our many municipalities, it’s time to use the tools that have been developed in other states to measure objectively both the service needs of towns and their capacity to meet those needs – and find a way to decrease the reliance on property taxes to close the gap between the two.
John A. Elsesser is town manager of Coventry.