Property taxes in Connecticut: Slow the growth or redistribute the burden?

(Dec. 12, 2007) How can Connecticut reduce the property tax burden on residential, commercial and industrial taxpayers alike, maintain important local services and promote economic growth? The answer is still elusive, even to a top-level group specifically studying the issue.

During the final round of state budget negotiations last summer, lawmakers created a Property Tax Cap Commission to accomplish a narrow but vital mission — assess what kind of an impact various caps on property taxes would have on taxpayers and municipalities.

Businesses in the state have long been concerned with property taxes in Connecticut and how they drain economic competitiveness.

Commission members have been discussing a variety of issues, including the potential impact of a property tax cap on funding for education; the imposition of circuit breakers; and how, under state law, the City of Hartford has shifted some additional tax burden to employers.

While it’s an issue that has been studied for decades, it remains a concern for which no one has yet found a solution.But two key factors for commission members to keep in mind are:

• Employers and residents alike are having difficulty with property taxes
• Businesses pay property taxes on their equipment (such as desks and chairs) in addition to taxes on their real property.

That’s why the idea of shifting property tax burdens from one group to another is not a practical solution.

CBIA believes that property tax reform should include:

• Meaningful and sustainable property tax reductions for residential, commercial and industrial taxpayers
• Realistic and permanent limitations on municipal spending growth
• Reforms in state laws on collective bargaining, binding arbitration and prevailing wage
• State incentives to encourage municipal budget best practices and regional compacts to provide more-efficient delivery of quality municipal services

On Monday, Jan. 7, the commission will meet again. CBIA will provide updates on its progress. For more information or to share your concerns, please contact Bonnie Stewart at StewartB@cbia.com.