Achieving Reform Is Now Within Reach

The cost to realize and sustain equity in the property tax system and correct both the needs-capacity gap for cities and towns and the cost-capacity gap for education is in excess of $1 billion annually - money which the Property Tax Working Group believes can be found within the state’s existing budget and revenue framework.

1. Seize the Moment

New state revenue is not essential to implement the property tax reforms we propose because there is more than sufficient surplus revenue generated by the state’s current revenue system and budget allocations to completely fund the reform package.

We put forward for consideration that restructuring the state’s property tax system for FY24 should be viewed by state policymakers as analogous to the successful program enacted by policymakers in FY18 to restructure Connecticut’s pension debt. The budget controls that prioritized pension debt prepayment—including the volatility cap and raising the ceiling on the Budget Reserve Fund-- had the effect of elevating debt prepayment above the typical yearly budgets. The result was, in effect, a new budget structure.

If the current revenue structure continues to generate an annual surplus, the state’s challenge in implementing property tax reforms is not to legislate new funding to finance the reforms but rather to elevate the status of property tax reforms as a policy priority to make an appropriate claim on the revenue already generated by the current tax system. In short, balancing the policy priorities of property tax reform and debt prepayment can BOTH be accomplished within the parameters of the revenue generated by the FY2018 budget reforms.

Despite our belief that new revenues are not key to property tax reform, if historic annual revenue surpluses do not continue, or if current policy priorities are not changed to allocate an appropriate share of the “surplus surplus” to funding reforms, where could the revenue come from to implement these reforms?

2. Collect what is Owed from Taxes Already in Place.

According to the 2021 Connecticut CREATES Report, there may be as much as $1.1 billion in revenue due the state which is not now being collected and the Department of Revenue Services has stated that the number may be as high as $2.6 billion.

3. Act in whole or in part on the recommendations of the Connecticut Creates Report

4. Regionalize services through the Councils of Governments and the Regional Education Service Centers