I am proud to have won increased tax relief for New Britain, making possible a cut in property taxes for a fourth year in a row. And I am especially proud of voting to approve legislation that would have cut tax burdens $10 million for New Britain taxpayers, including... $1000 in property tax relief by doubling the Property Tax Credit...cutting income taxes for 95% of income tax payers....relief working families through a new Earned Income Tax Credit....lowering the gas tax by $.25/gallon.

But, there was disappointment...

Unfortunately the Governor vetoed $10 million tax relief for New Britain I had voted to approve and she even cut hundreds of thousands of the tax relief funding for the city that she first promised - making the city’s budget tighter than it would have been..

Information on Property Taxes and Why Reform is Needed.

The property tax system is unfair.  It is an unreasonable and inadequate way of funding local services and it does harm to cities like New Britain. But the problems that arise from the property tax system in our state are not just limited to New Britain and are even not just limited to central cities. Our over-reliance on property taxes causes problems for towns like Newington and, in fact, the whole state.

Here is a quick overview of these problems:

1. Sprawl. The property tax system encourages a pattern of development that undermines the quality of life in Connecticut and stresses our infrastructure. With 169 municipalities competing for property tax revenue that comes from development, small towns change from rural locations into suburbs. The same process stretches urban development beyond the borders of our central cities and into existing suburbs. Meanwhile, more and more economic vitality is drawn out of the established cities – especially as their tax rates increase – leaving them increasing isolated and poor. Central cities, especially, reach a breaking point in which their overtaxed middle class – who have mobility – move out, leaving behind senior citizens and poor residents – who do not have the same mobility – who are then forced to pay even higher taxes.

2. Setting generations against each other. In towns and cities across the state, the politics of local budgets are astoundingly similar. Parents, who want a quality education for their kids are set against seniors on fixed incomes who cannot afford to pay more property taxes. It is all too common for towns to have to run multiple referenda before passing a budget, and cities are forced into increasingly precarious budgeting with the growing disconnect between the need to fund schools and basic public services (like public safety) and urban taxpayers’ shrinking ability to pay.

3. Inequality. The property tax system produces gross inequality in the way taxation is done in our state. It is seriously unequal in two separate, but closely related ways:

INEQUALITY #1:

The middle class and poor bear more than their fair share of taxes, statewide.

While much ado is regularly made the amount that the wealthiest people in our state pay in the state income taxes, these exhibitions always seem to conveniently leave out certain important facts:

FACT: The state income tax is not the largest tax:

l Income tax revenue: $5.7 billion - 29.9% of state-established taxation.

l Property tax revenue: $6.2 billion - 33.2% of state-established taxation.

FACT: The income tax is not the largest tax burden for most people:

l For only the wealthiest 5% is the state income tax the largest tax burden under state law.

Click to enlarge.  [1]

l About three-quarters of Connecticut families pay more in property taxes than they do in the state income taxes.

Click to enlarge.  [2]

FACT: Middle class families pay four times as much of their income in property taxes as the wealthiest 1%.

Click to enlarge.  [3]

Senior citizens on fixed incomes tend to pay an even larger burden. (I often meet seniors who pay 10%, 20%, even 30% – or more – of their incomes in property taxes, alone.)

FACT: Even with income taxes taken into consideration, the middle class pays twice as much of their incomes as the wealthiest 1% in our state after federal tax offsets are taken into account.

Even without the federal offsets, the middle class pays a 60% more.

INEQUALITY #2: 

Property tax burdens are vastly different among municipalities.

There are many reasons for these differences, but there is no question that the differences in income among municipalities is a large reason.

Is it fair that the residents

of these towns pay more . . .

. . . while the residents of these towns pay less?

[4]

With the largest tax that most people pay being levied at the local level, municipal boundaries divide responsibility for paying for many public-sector services. Often, people benefit from public services provided in municipalities where they work or visit, but do not have to pay for these services because they do not live in that municipality. Then there is the fact that the greatest social needs tend to appear in a completely different set of municipalities than the municipalities where those of the greatest means live. The net result is a shifting of tax burden down the income scale, from people who can well afford to pay and onto people who cannot.

Here is an estimate of how much different income groups in our State received out of the total personal income of the State.

Click to enlarge.  [5]

The shaded area represents the middle class, and the filled-in slice represents the richest 1%.