The technical language that surrounds property taxes in Connecticut — words like “revaluation” and “mill rate” — may not seem like the makings of a heated political debate. But with residents of New Haven and other cities facing rising tax bills, the property tax is becoming a growing source of concern across the state.
Yet even as most state and local officials agree that property taxes are too high, little consensus has emerged concerning a solution. For some, like New Haven Mayor John DeStefano Jr. and other municipal leaders across the state, the answer lies in an overhaul of the state’s tax system. For others, piecemeal “relief” efforts or spending cuts provide the key to lowering tax bills across the state.
As a result, while calls for reform from local residents and New Haven officials are growing louder, few expect any important changes to the state’s tax system — or any significant relief for taxpayers — in the near future.
“I just can’t predict what the General Assembly is going to do,” DeStefano said last week. “But I don’t think there will be any meaningful property tax relief this year.”
Most cities and towns, including New Haven, rely almost entirely on local property taxes and state aid to pay for education, police and fire services and other municipal spending. New Haven, for example, expects 42 percent of its funding next year to come from property taxes and 51 percent to come from state aid.
Consequently, as state aid to cities and towns has slowed in recent years due to fiscal troubles in Hartford, municipalities have raised their property tax rates to balance their budgets. This month, DeStefano proposed a 3.7 percent tax increase for New Haven next year — the city’s third consecutive tax hike — while a scheduled revaluation of properties across the city is expected to raise residential property taxes by another 12 to 15 percent the following year.
Ward 27 Alderman Philip Voigt, the chairman of the Board of Aldermen’s Finance Committee, said local leaders considering the mayor’s recently proposed budget are wary of increasing taxes again but may have few other options.
“When you look at the budget in total, I don’t know where you would cut the $5 million you need to prevent a tax increase,” said Voigt, a Democrat.
DeStefano and many other large-city mayors in Connecticut are also critical of the property tax itself as a means of raising money. Since taxes rise with property values — not with the incomes of homeowners — they can often result in a higher tax burden for poorer homeowners.
With a rapid increase in property values in New Haven and across the state over the past decade, many lower-income residents, especially senior citizens on fixed incomes, have been particularly hard-hit by their tax bills.
“For those who have owned their property for a long time, the more taxes increase, the more likely it is that they will not be in a position to pay the increased taxes as the value of their property went up,” said David LeVasseur, an undersecretary with the state’s Office of Policy and Management.
But outside New Haven and other major cities, the blame is often attributed to local governments for failing to rein in spending. In particular, Gov. John G. Rowland’s administration and many of his Republican allies in the General Assembly have called for a reform of cities’ collective bargaining procedures to limit the growth of municipal budgets.
“Tax increases are created by the budgets that the cities have,” said Senate Minority Leader Louis DeLuca, a Republican from Woodbury. “In the case of New Haven, which gets [over 50] percent of their total municipal budget in state funds, that would mean to me that they would need a little more stringent budget control.”
While DeStefano chaired a commission last year that released a series of broad recommendations for reducing the state’s reliance on the property tax, he said it was unlikely that its major proposals will be introduced this year. Several Democratic legislators in Hartford are supporting a “homestead exemption” that would exempt $75,000 of a home’s value from taxation, but critics are concerned that such an effort would result in higher taxes for businesses across the state.