Thank you, Chairs, Ranking Members, and distinguished members of the Finance, Revenue and Bonding Committee for the opportunity to submit testimony on SB 101, An Act Establishing a State-wide Property Tax on Certain Residential Real Property. Yankee Institute opposes this bill because it would create a new statewide property tax on residential real property with assessed values above $3 million, adding a broad new tax burden at a time when Connecticut families and homeowners already face some of the highest costs of living and doing business in the nation.
According to the introduced bill language, the proposal would impose a graduated state tax, including 2 mills on properties between $3 million and $5 million in value, 3 mills on properties between $5 million and $10 million, and 4 mills on homes above $10 million, effectively layering a second property tax on top of local taxes that residents already pay.
While the bill is framed as a way to generate revenue from high-value properties, expanding broad-based taxation of real property is not the right policy approach. Connecticut’s fiscal environment is already heavily reliant on property and income taxes, contributing to high housing costs and making our state less affordable compared to neighboring states. Introducing a statewide property tax sets a concerning precedent by undermining the long-standing local control of property tax systems and increasing the overall tax burden without clear evidence that existing spending inefficiencies have been addressed first. Broader revenue pressures should be mitigated through targeted reforms that improve efficiency and competitiveness, not by creating new revenue streams that effectively tax wealth rather than economic activity.
In addition to affordability concerns, a statewide property tax could inadvertently reduce mobility and economic activity. High-value residential property owners, including retirees, entrepreneurs, and homeowners who have built equity over decades, could face substantially higher annual costs simply because of where they purchased property, potentially prompting relocation to lower-tax states. In a state where out-migration and talent retention are already issues, newly created tax burdens on residential property risk exacerbating those challenges. Furthermore, shifting revenue responsibility from local to state levels without aligning it with a clear spending reduction strategy merely provides more capacity to spend, rather than encouraging fiscal discipline. Expanding taxation in this way should be approached only after exhausting measures to control cost growth, eliminate waste, and strengthen budget transparency and oversight.
Connecticut should also be mindful of the competitive implications of broad new taxes. In a region where labor and capital are mobile, expanding the tax base through property taxes makes the state less competitive relative to other states that have resisted such expansions. In times where affordability is a defining issue for many families, policymakers should focus on structural reforms that reduce barriers to housing, support job growth, and enhance economic opportunity, not on adding new taxes that broadly increase the cost of living.
For these reasons, Yankee Institute respectfully urges the committee to oppose SB 101.
