Awaiting the Rebellion

Crisis precedes dramatic change, and for proponents of property tax reform in Connecticut, the crisis is not here yet. Oh, it’s painful for homeowners out there, but not so painful that the general public is demanding, in clear and angry tones, a solution.

As is always the case, small groups of municipal and legislative leaders are huddled in corners trying to come up with an answer to the growing problem of the property tax burden. Each July, homeowners open their tax bills to get hit with a fee that can often represent 10 to 25 percent of their annual mortgage payment. It is enough to make some reconsider the benefits of homeownership, or at least seek shelter in a town with lower taxes.

The municipal property tax system has been an issue for decades, but the intensity of the pain it causes has grown worse in recent years. It is being blamed for a decline in homeownership, stagnant business growth, reduced employee retention, the brain drain and suburban sprawl. The property tax makes the short list of factors affecting almost any issue holding back Connecticut’s economy.

Quick Fixes

Yet for years, the only meaningful solution offered to address the problem has been the short-term fix of more state aid to cities and towns. There is a property tax credit for homeowners taken off state income tax payments, and there are efforts by some municipalities to share resources. But a big fix has been hard to come by, mainly because it would require wholesale reform.

At a recent public hearing concerning the construction of a new magnet school in Glastonbury, members of the town council argued the cost of the new school would not be reflected in local taxes, because the state is paying for almost the entire project. To which one resident responded, “That’s fine by me, if the state we are talking about is Montana, but I’m betting it’s Connecticut, and I pay those taxes too.”

That’s the root of the problem with property tax reform: It’s all our money. So dramatic change will not necessarily change the tax burden, it will only change where we send the check. Maybe that’s part of the solution. Maybe it would help if the state took on a bigger part of the tax collection responsibility and played a bigger role in the redistribution of the revenue to where it is needed on a local level.

The bigger half of the problem is the spending side. That’s where the tentative push for regionalization comes in.

Connecticut’s political leaders have been fearful of pushing regionalization too hard because it is believed that we — as voters — cling to the tradition of local control. We all want our own police and fire departments, our own libraries, our own snowplows flying our own town colors. Maybe that’s the old Connecticut.

Time For A Change?

Are the boroughs, villages and districts that many of us grew up with really that important to the present day population, which isn’t necessarily from here? Suppose a change in political subdivisions could dramatically reduce the cost of living?

An effort to reform the property tax system through a tax shift and forced cost sharing would result in a major political battle. For that reason, it is unlikely any serious effort will be made in the coming year. It will be hard enough just to get the state budget back in balance.

In 2010, the combination of continuing annual tax increases and the race for governor could bring about the public revolt necessary to put a serious effort for tax reform on the agenda.

Dean Pagani is a former gubernatorial advisor. He is V.P. of Public Affairs for Cashman and Katz Integrated Communications in Glastonbury.