Connecticut Municipal Lobby Seeks Financial Reform

The Connecticut Conference of Municipalities (CCM), a lobby representing 149 of Connecticut’s cities and towns, is pushing for municipal finance reform this campaign season. They claim while cities and towns are responsible for providing the majority of public services in the state, the statutory limits on local sources of revenue have led to an over-reliance on the property tax. Connecticut Towns and Cities rely on the property tax for 72% of municipal income while most of the rest comes from state aid.  Connecticut is more dependent on property taxes to fund local government and PreK-12 Education than any other state in the nation. According to the CCM this is caused by chronic state underfunding of education.

Their proposed solution includes;

– Increasing state revenue sharing through the municipal revenue sharing account (funded by the state sales tax and real estate conveyance tax);

– Increasing the payment In lieu of taxes (PILOT) reimbursement rates to 100% for private hospitals and colleges (currently 35%) and state-owned property (currently 27%);

– Eliminate unfunded and underfunded mandates like the minimum budget requirement.

According to the CCM, these proposals will ease the burden currently placed on Connecticut residents paying property taxes.  This may become particularly pertinent with the state of the housing market in Connecticut. The median home price in Connecticut fell 8.2% from Q2 2011 to Q2 2012. In towns like Brookfield and Darien, the declines have been much more dramatic with 22.4% and 19.6% declines respectively over the same period.  With such drastic declines in home values, the expected property tax revenues will also decline which will exacerbate the revenue problem faced by Connecticut’s cities and towns.

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