Property Tax Overreliance in Connecticut Slows Economy

The per capita property tax burden in Connecticut is $2,473, an amount that is almost twice the national average of $1,388 and second highest in the nation, the Connecticut Conference of Municipalities (CCM) says in a new report highlighting the state’s overreliance on property taxes to fund municipal government.  Connecticut ranks eighth in property taxes as a percentage of median home value, but CCM says property taxes are not covering the costs of running the state’s cities and towns. Connecticut's 169 cities and towns, along with their boroughs, fire districts and other political subdivisions, levied about $8.7 billion in property taxes in 2009-10, the last fiscal year for which CCM has complete records, the CT Mirror reported, adding that the total, once updated, likely would clear $9 billion for the current year, according to CCM.

Property taxes provide about 72 percent of the revenue for municipalities, while state aid -- which stands at about $3 billion -- represents 24 percent, CCM indicated.  In another breakdown, the CCM report found that:

• 20 towns depend on property taxes for at least 90 percent ofall their revenue
• 48 municipalities rely on property taxes for at least 80 percent of their revenue

CCM's five-point plan calls for expanding the new revenue-sharing arrangements that began last year and allows cities and towns to get some revenues from state sales and real estate tax increases.