January 2017

Equal Funding for Equal Effort: A Proposal to Reform Property Tax Funding for Local Education in Connecticut

Ray Noonan

Thriving communities are made possible by good schools, roads, and other public systems. To support these building blocks of local economies, Connecticut’s cities and towns need a stable revenue source that generates needed resources without placing an unfair load onto taxpayers.

Currently, the property tax does the opposite. Connecticut’s property tax system makes residents in poor communities pay more, stifles economic development, and exacerbates racial inequalities. At the same time, because local school funding is so dependent on local property taxes, disparities in property wealth lead to disparities in opportunities for children.

We explore a partial solution to this problem: a system in which communities that tax themselves equally for education receive equal per-pupil funding for education. Our model would cut taxes for 2.7 million residents in 117 cities and towns while maintaining local control and education funding levels.

The report  is based on Vermont´s adjusted statewide property tax system, with the following key features:

  • Gives 2.7 million residents an average tax break of about $400 per person.
  • Fully funds the Payment in Lieu of Taxes (PILOT) program, alleviating inequities incommunities where concentrations of government, university, and hospital property have eroded the tax base.
  • Reduces disparities in property tax rates and thus reduce incentives for business to relocate from communities with the highest property tax rates to nearby communities with lower ones.
  • Consistent with tradition of local control, communities willing to tax themselves more to spend more on education are allowed to do so.
  • Consistent with tradition of taxing property to fund education.
Issue Areas:
Budget and Tax, Education