Report Calls For Shifting $1.25 Billion To Towns, Cities

By Susan Haigh

Associated Press

HARTFORD (AP) –– A report released Monday recommends shifting about $1.25 billion in state revenue to cities and towns to help municipalities cover the cost of public education.

The Blue Ribbon Commission on Property Tax Burden and Smart Growth Incentives says such a change in state tax policy could also help combat suburban sprawl. According to the group’s 55-page report to the General Assembly, too many cities and towns are reluctantly approving new big box stores and other development to generate enough local tax revenue to help foot the bill for local services.

Municipal leaders, the report said, are worried that many of their citizens –– including the elderly and those living on fixed incomes –– cannot afford to pay local property taxes any longer.

“This report is about what kind of state we’re going to be 10, 20 years from now,” said New Haven Mayor John DeStefano, the commission chairman.

“While this does not represent how you balance this year’s budget,” Mr DeStefano said, “it represents how you grow the state of Connecticut in a way that we want to –– to create a decent quality of life, create a place where our kids can get jobs and continue to live.”

The legislature created the 15-member commission in 2002 to find ways to reduce the state’s reliance on the local property tax to pay for schools.

The legislature reconvenes in February. It is unclear which if any of the recommendations will be passed into state law. Some have been suggested in previous years but died due to lack of support.

One proposal would allow municipalities to collect taxes other than local property taxes on homes, cars, and businesses. For example, the commission said municipalities could raise another $12 million a year if they collected a 15 percent surcharge on the state room occupancy tax.

The commission also suggested giving regions the ability to add a penny or more to the sales tax and only use that money for a regional project such as a stadium.

The group also recommended that the state take on a greater responsibility for funding local education. Marlborough First Selectman Howard Dean said the Education Cost Sharing grant, the largest state grant for public schools, would be modified.

Each district would receive from the state at least half of the minimum per pupil expenditure set by the state. Such a plan would benefit small towns because many cities already receive more than that from the state, Mr Dean said.

The plan also calls for the state to pick up half the cost of special education expenses –– some $300 million.

Mr DeStefano estimated the overall plan could cost the state about $1.25 billion. While much of the money would essentially be shifted from the state coffers to cities and towns, he suggested some could be raised by imposing higher income taxes on wealthy residents.

The group wants the legislature to look closer at suburban sprawl, recommending about $5 million in additional studies. Commission members said so-called “smart growth” planning and good land-use policies will also make urban centers more attractive to business and ultimately lead to well-paying jobs.

For example, the commission recommends greater use of mass transit and rail transportation to reduce reliance on automobiles.

“We are well on our way to becoming wall-to-wall suburb. Such development brings with it more roads, more congestion, and more pollution,” the report reads. “We are losing our remote rural character and the central urban core has become increasingly distressed.”

Mr DeStefano said he is concerned that many lots and old buildings sit empty in cities while rural and suburban orchards, farms, and open fields are being developed.

“Connecticut is consuming open space like an alcoholic consuming scotch,” Mr DeStefano said.