Connecticut has a rare opportunity, due to its positive budget situation, to correct the greatest inadequacy and inequity in its tax structure: the longstanding over-reliance on the local property tax. Property tax reform should be focused on correcting the serious flaws associated with this tax; which now constitutes the major source of funding for municipalities, and makes up 41.9% of the total tax burden for Connecticut residents.
There are two fundamental flaws in Connecticut’s property tax system. (1) Horizontal inequity: owners of property with similar values are taxed at different rates depending on which town they live in, and owners paying similar tax rates receive widely different services. (2) Vertical inequity: low- and moderate-income households are subjected to far higher effective property tax rates than high-income households.
Property tax reform must be done in a way that corrects these structural flaws. If we fail to correct both the vertical and horizontal inequities, we will continue down a path of widely disparate educational opportunity, fractured and inefficient delivery of needed services, hollowed out cities, widening racial and economic disparities, sprawling suburbs, fleeing businesses and an out-migration of the next generation of talent.
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