Property tax help should be a priority

While the rest of the state talks tolls, the Connecticut Conference of Municipalities is hoping to redirect some attention to a perennial state challenge — the reliance of local communities on property taxes. It hopes to make the question a major issue in the runup to the 2020 election season, which is both a worthy goal and a difficult task.

According to the nonprofit Tax Foundation as reported by the CT Mirror, the average property tax bill in Connecticut is nearly twice the national average. And with aid from the state government stagnant or declining for many towns over the past decade, the issue has taken on greater urgency.

CCM announced Tuesday a commission that aims to put together a new plan for property tax help for towns and cities and sketches out a different approach from previous years. The group plans to appeal directly to voters rather than taking a proposal to the General Assembly, and inform voters of the panel’s outlines and goals.

It aims to tackle questions related to the funding of local services through means other than property taxes, and puts a special focus on rising pension and retirement benefit costs. With so much of currently raised funds going toward paying for former employees’ benefits, less is available to handle current needs, CCM says. Until that cycle can be broken, a chronic shortfall is inevitable.

Property taxes are regressive, more than almost any other form of taxation, and the state’s overwhelming reliance on them leads to wide inequalities among neighboring communities. The cities, especially, are at a profound disadvantage because so much of their property is nontaxable, either as government buildings, nonprofits or other public uses.

The system to reimburse towns and cities for their nontaxable properties, the Payment in Lieu of Taxes, is woefully underfunded and should be a priority itself for mayors to see revamped. PILOT grants are supposed to replace about 45 percent of the funds communities lose because they can’t tax certain properties, which would be tough enough to handle. In reality, communities get about 14 percent back from the state.

Property taxes are not going away, but CCM is right to make them a central issue. With an overwhelming proportion of local expenses paid for by property tax receipts, towns and cities are left with few options to fund their operations. A greater diversity of funding sources for communities would help relieve some of that constant pressure while allowing for greater flexibility and the potential for innovation and growth. Transportation is atop the state agenda for the foreseeable future, and for good reason. Without better transit options, the state economy will continue to be stuck in neutral. But there has to be room on the docket for something other than bridge tolls. Property taxes are a constant source of stress for both local communities and residents, and devising alternatives to our current malfunctioning system should have bipartisan appeal.

Lawmakers and residents should keep a close eye on the panel’s findings and recommendations.

With an overwhelming proportion of local expenses paid for by property tax receipts, towns and cities are left with few options to fund local operations.