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Cap Would Finally Reform Property Taxes

April 18, 2007

The General Assembly's Democratic majority has always been good at talking the talk when it comes to property tax reform.

Unfortunately for Connecticut's overburdened property taxpayers, they haven't done much more than that, even though they've had years to get it done.

Now, Gov. M. Jodi Rell has put forth a proposal that would offer substantial relief to local taxpayers and control the growth of property taxes over the long term.

It has been well-received by almost everyone but Democratic legislators.

They have vilified the governor's proposal, calling it "terrible," "harebrained," "not well-thought out," and "dead on arrival."

The governor's plan would limit property tax increases for Connecticut municipalities to 3 percent each year. It is a property tax cap rather than a spending cap - although the cap would clearly discourage excessive spending.

Recognizing that there will be times when unexpected problems or emergencies may require towns to spend more than the revenue the cap allows them to raise, the governor's proposal authorizes municipalities to exceed the limit and provides specific guidelines and procedures for doing so.

A town may increase property tax growth by more than 3 percent if its grand list grows by more than 1.5 percent. The percentage growth in the grand list over 1.5 percent can be added to the 3 percent cap. For example, if the grand list grows by 2.5 percent, the property tax cap can be increased to 4 percent.

Towns can override the cap with the approval of two-thirds of the legislative body (the town council or board of selectmen) and by a simple majority vote of residents. Lastly, if an unforeseen emergency such as a flood or a devastating fire takes place, a town can declare an emergency and temporarily exceed the limit - if the state Office of Policy and Management and two-thirds of the town's legislative body agree.

Since the governor's property tax plan is intended to limit property tax increases to 3 percent or less each year, her proposal does not make it easy for towns to override the cap.

We support the property tax cap because we believe it will enable cities and towns to finally get a handle on spending - which is usually the driving force behind property tax increases. If local elected officials know they cannot raise taxes by more than 3 percent in any given year, it will force them to spend taxpayer dollars only on projects and programs the people of their towns genuinely want and need.

Because contracts with municipal government employee unions account for the largest share of local budgets, the 3 percent cap on property tax increases will give negotiators for Connecticut's towns and cities more of an incentive to dig in their heels when union negotiators make unreasonable demands that could lead to major increases in spending.

When municipal and union negotiators fail to reach agreement and a contract dispute has to be resolved under the state's binding arbitration law, arbitrators will have to consider the 3 percent cap as one of the factors affecting their ruling.

Our state has the second-highest property taxes in the country. Only in New Jersey are local property taxes higher - and New Jersey is on the verge of imposing a 4 percent cap.

Connecticut municipalities have pushed up property taxes by an average of 6 percent a year for the past five years. Property taxes in Connecticut exceed the national average by 85 percent.

Massachusetts used to have the highest property taxes in the United States until it capped property tax increases at 2½ percent several years ago. It is now ranked seventh.

Forty-three other states have imposed limits on local taxation and 29 of them have adopted caps on property tax increases.

The time is long overdue for Connecticut to join them.

The legislature's Democratic majority has been talking about property tax reform off and on for several years.

Now, because Gov. Rell has proposed a property tax limitation plan similar to the one that has worked so well in Massachusetts, the Democrats have been forced to do something to counter the governor's plan.

They are proposing to increase the existing $500 property tax credit for people paying the state income tax to $1,000, which only helps property owners who pay income taxes. Many seniors and others who live on fixed incomes or do not earn enough to pay state income taxes will gain little or no relief under the Democratic plan.

The Democratic proposal does not offer comprehensive property tax relief. The governor's plan does exactly that.

That's why the Democratic majority should swallow its pride and pass the governor's plan.

It is a better plan and it should be given a chance to work.

William A. Hamzy is a state representative from Plymouth and Ron Burns is a state representative from Bristol. Both are Republicans.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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