October 7, 2008
Connecticut Post Discusses Property Taxes in the 2009 State Business Tax Climate Index with Communications Director Bill Ahern
"State Relies Too Much on Property Tax"
By Rob Varnon
At a time when the real estate market is in turmoil—falling prices, slower sales—being one of the most property-tax reliant states in the nation doesn't bode well for Connecticut town budgets.
"The outlook for revenues is alarming," said William Ahern, a spokesman for the Washington, D.C.-based fiscal policy watchdog Tax Foundation. He said on the whole, tax revenues for 2009 could be less than the amount collected in 2008 for Connecticut and many other states.
On Monday, the Tax Foundation released its annual report ranking the states on the fairness of tax policies and whether those policies encourage business investment. Connecticut ranked 37, but Ahern said the state ranks above average in almost every category except one.
"It's the property tax," he said. Connecticut has, according to the Tax Foundation, the 49th worst property tax policy in the nation. Only New Jersey is worse, by their standard. He said communities that depend as heavily as Connecticut does on the property tax could be facing real problems if housing values continue to fall. Think about what it would mean to the mill rate if property values fall to their pre-bubble levels of almost a decade ago, he said. Some places might have to double their taxes to maintain services, he said.
