There are only two ways to achieve property tax reform. Cities and towns can cut costs or cities and towns can diversify the revenues they collect. This bill does both. It offers meaningful incentives to municipalities that opt in, and opting in requires working more efficiently.
1. It encourages towns to cut costs by creating incentives for to:
· Reach economies of scale delivering services like health care, special education, marketing, and human resources.
· Buy in bulk with pooled purchasing
· Negotiate labor agreements regionally
· Research and development curriculum
· Provide special education
· Educate pre-school age students, …
3. It gives municipalities new revenue by:
· Distributing a share of the property tax on new economic development regionally
· Distributing a portion of the sales tax generated in the region to participating towns
· Distributing a share of the hotel tax collected in the region to participating towns
· Making it possible for municipalities to compete for federal economic development grants and operating assistance. (Cities and towns are currently ineligible for this assistance.)
· Generating new property tax revenue, making our regions more competitive locations for new business creation and existing business expansion.
4. It stops the race to the bottom:
· Participating cities and towns will agree not to compete with their neighbors for new development, thereby reducing the tendency to give away future tax revenues to lure economic development from a neighboring city or town today.
· It encourages cities and towns to channel development to appropriate sites in the region thereby reducing the costs of building new infrastructure and maintaining it.
· It encourages cities and towns to preserve cultural assets and the beautiful sites that foster a tourism economy and residents of choice.
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Actually, there are multiple ways to achieve property tax reform, not just two.
ReplyDeleteFirst, CT's property tax is based on an agrarian society where a family's land accounted for it's ability to produce income from farming, fishing, or building a business. The real property owned by most people in the 21st century is used solely for housing. It is not income producing and is likely zoned "residential only". Therefore the property tax has become a regressive and manipulated tax that is punitive to the elderly on fixed incomes. A progressive income tax is the fairest form of taxation, but the least likely to be implemented in CT because the legislators are elected by contributions from CT residents with the highest incomes.
Second. The current system of Property Revaluation has so many loopholes and opinion based valuations that fairness is all but nonexistent. For example, some municipalities purposely value low and set mill rates high so that legislators assume those municipalities are "poor" and need greater help from the state. Municipalities which value high and set low mill rates are punished by receiving little state funding.
Further, residents who receive "unfair" valuations are required to meet with their municipality's Board of Assessment Appeals which has absolutely no training in valuations and has no understanding of the Appraisal company's valuation definitions and formulae because that information is considered "proprietary." The nest step is to hire an attorney and an appraiser and take the case to court -- which is not financially or intellectually posssible for many elderly citizens of CT whose only other choices are to move to another state (moving at age 80 is not a happy prospect) or to let their homes and their bodies deteriorate while they remain in their overtaxed home.
Progresssive income taxes (individual and corporate) are fair. User taxes are fair (on non-essentials). Spending can be reduced, especially for government workers' salaries and retirement benefits which should be indexed rather than negotiated, priorities can be reset to benefit the many rather than the few. Unfunded mandates can be eliminated, pay-go policies can be implemented.
Regionalism via economies of scale may save small amounts for local governments. But regionalism will never change the inequities of the 18th century property tax concept.
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