Connecticut’s Property Tax Challenge

November 19, 2013

If you could live anywhere in the country, where would you go? If low taxes are on your “must have” list, Connecticut is probably not your top choice.

Connecticut was recently ranked as the second least tax-friendly state in the U.S. by Kiplinger. We were topped only by California as the state with the highest taxes overall. Our state also has the second-highest median property taxes in the U.S. after New Jersey, according to the Tax Foundation. The median property tax on the state’s median home value of $291,200 is $4,738.

We have all become familiar with high taxes, but that does not mean that we are any more accustomed to them. So, what can we do to stop this trend?

The first step to advocating for lower taxes is to understand the tax process here in Connecticut. Today, I ask everyone to take a closer look at property tax in the Constitution State.

Property tax includes taxes on real-estate and personal property (including motor vehicles). Real-estate taxes are calculated using two numbers, the assessed value of your physical home or business storefront and the mill rate of the town in which you are located.

A mill represents $1.00 of tax for each $1,000 of assessment. Each town determines their own mill rate by reviewing how much money it will need to operate for the upcoming year. Once the municipality knows the budget that they will need to meet, the town can subtract their planned income and revenue from that number, giving the town a number they will need to collect in taxes. Divide that number by the taxable assessments in the town, and the result is the mill rate.

Mill rates can vary drastically from town to town, relying on the expenses defined individually by each municipality. You can view your own town’s most recent mill rate on the Office of Policy and Management website.

Motor vehicle taxes are calculated a bit differently, but still factor in the local mill rate of your town. Instead of inspecting each car, towns assess vehicles based on 70% of the average retail value as determined by the Kelley Blue Book or other resource your assessor has committed to. That number is considered along with your town’s mill rate to determine the amount of property tax you must pay for your car each year. So, two identical cars can be taxed very differently from town to town, and usually residents living in cities pay hundreds more than those in the suburbs every year.

Some qualified individuals, such as veterans and their spouses, those who are disabled and people over 65 years of age, may be eligible for tax exemptions or abatement programs, but these forms of relief depend on the policies of individual municipalities. If you move from one Connecticut town to another you have to re-file for exemptions and the relief you received before may no longer apply.

In 2013 we did see some new legislation aimed at providing property tax relief. Municipalities can now grant abatement to surviving spouses of emergency medical technicians killed in the line of duty thanks to Public Act 13-204, and towns can now grant 100% disabled veterans with limited income increased property tax exemptions after PA 13-224 went into effect. We also began to address eliminating the motor vehicle tax by introducing plans to eventually phase out the car tax; but we must be cognizant of the loss of revenue to the municipality that they will have to make up.

While these efforts are welcome, they are not enough. The property taxing system requires too much of many individuals and families. How can we expect to bring new people and new businesses to the state when Connecticut ranks among the worst in taxes?

If we want to improve our negative reputation for high taxes, we have to push for lower taxes in municipalities across our state. This action must be taken on as a collaborative effort between the municipalities and the state. Each year the state continues to burden towns and cities with unfunded mandates and has not increased its percentage of education dollars spent in a very long time. Education is a primary responsibility of government which is guaranteed to provide a free public education. Next week, we will focus more on education initiatives in Connecticut.