Connecticut slid backwards in the Tax Foundation’s annual ranking of states based on their business tax climate. Connecticut ranked 44th in the nation - one ranking lower than last year - and far behind Massachusetts, which ranked 22nd in the nation. Connecticut, however, did beat out New York and New Jersey.
Connecticut will impose a state property tax of 5 mils on secondary and vacation homes, according to figures from the latest budget proposal. The state tax would be in addition to the local property tax already paid by homeowners and is expected to raise $32 million per year.
Noticeably absent from the latest budget by House Democrats are 11 of the 12 reforms Democratic senators requested as a condition of their approval of the union concessions deal passed on July 31st. In exchange for their votes, the Senators composed a list of 12 cost-saving reforms, which included requiring a vote on every union contract, reforming arbitration laws and ending overtime in pension payment calculations after the expiration of the SEBAC agreement in 2027.
A study of Connecticut’s population loss conducted by the Office of Policy and Management shows that Connecticut is experiencing a “slight loss” of individuals earning more than $5 million per year. The loss of high earners could be especially problematic for a state that relies heavily on its highest income tax bracket for state revenue.
Gov. Dannel Malloy’s executive order, which zeroes out education funding for 85 school districts in Connecticut, could result in massive property tax increases - even to towns that are already struggling - if the state legislature cannot reach a budget deal by October 1. The property tax increases needed to deal with the cuts could mean up to a 40 percent increase to the mill rate for some municipalities, equalling 2.5 percent of the average household income in those towns, according to data compiled by the Western Connecticut Council of Governments.
As Connecticut residents prepare to send in their vehicle property tax payments in August, a number of Connecticut municipalities may be missing out on large sums of tax dollars. More and more residents have been registering vehicles in neighboring states that don’t charge property taxes, according to municipal officials and tax assessors.