Governor Malloy Proposes to Eliminate Property Tax Credit and Bill Towns for Teachers’ Pensions

February 5, 2017

Yesterday Governor Malloy announced that his proposed budget would not only eliminate the state property tax credit, but shift $407.6 million onto cities and towns to pay nearly one-third of the annual cost of municipal school teachers’ pensions.

Shifting the burden of the teachers’ pensions from the state to the towns and cities as a result of mismanagement at the state level is patently unfair and further burdens already over-burdened municipalities. If the state is going to shift pension burdens onto municipalities it needs to look at mandate and arbitration reform to help towns and cities better control education budgets.

Additionally, the administration’s proposal of eliminating the state property tax credit is the wrong policy. We should be looking for ways to increase this credit for middle-class families, not reduce it.

Senate Republicans have proposed a bill this year that would gradually increase the credit, Senate Bill No. 415, An Act Increasing the Property Tax Credit Under the Personal Income Tax for a Primary Residence or Motor Vehicle. This would benefit many people – of the 874,000 who benefit from this property tax credit:

  • 81% have incomes less than $100,000
  • 66% have incomes less than $75,000
  • 44% have incomes less than $50,000

These initial proposals from the governor raise many concerns as it pertains to the upcoming budget address on February 8th and the overall fiscal health of the state.