Reduce Property Tax Burden

December 21, 2006
Oped By EDDIE A. PEREZ

When the General Assembly convenes Jan. 3, I will ask legislators to take a bold step forward and adopt a property tax reform plan that provides property tax relief for all Connecticut families.

The plan I am advocating would significantly lower the tax burden on working families that pay one of the highest shares of income in property taxes in the nation. It would also encourage the growth of homeownership in Connecticut municipalities where 50 percent or fewer of the residents own their own homes. These communities are faced with a stagnant property tax base and high property taxes as a result of providing significant public services to a population much less well off than the rest of Connecticut.

I am proposing a $1,500 property tax credit for municipal property taxes paid against state income taxes for every Connecticut family regardless of income. Additionally, I am proposing a $3,500 credit for property taxes paid by residents in communities such as Hartford, Waterbury, Bridgeport, New Haven, New London, New Britain and Windham where less than 50 percent of the residents own their own homes and the local tax burden has played a role in slowing the growth of homeownership. Under my proposal the value of the credit could not exceed 75 percent of the income taxes owed, so all families would continue to shoulder a share of the state income tax obligation.

The $1,500 credit for all Connecticut families effectively will reduce the average property tax bill of $4,429 by about one third. This provides significant and necessary relief for most Connecticut families who pay property taxes on homes that they could not afford if they had to purchase them in today's real estate market, according to a recent study by the Partnership for Strong Communities. The $3,500 credit for families in communities with low homeownership rates and concentrations of poverty would lower barriers to buying homes and encourage the growth of a healthy middle class. Increased homeownership means greater wealth for residents, less crime and more neighborhood stability for the Connecticut communities that need it most.

The property tax burden falls disproportionately on working families because it is a tax, not on their income, but on the value of homes where they raise their families and on the cars they need to commute to work. This regressive tax burden is not serving Connecticut well. In order to pay for these credits, the legislature will have to look for other sources of revenue. This includes reviewing the top income tax brackets for the ultra-rich and reviewing the tax burden for corporations that have paid minimal state taxes because of loopholes in existing state tax law. Additionally, the legislature should support the creation of a state Earned Income Tax Credit based on the federal program to help very low income working families offset their property tax burden.

The time for action on property tax reform is now. I look forward to working with the General Assembly to implement a bold reform plan that brings comprehensive reform to our property tax system.

Eddie A. Perez is the mayor of Hartford.