Connecticut Citizens Assembly Proposes Highway Tolls and Millionaire Tax to Slash Property Burdens

Key points

• The Connecticut Citizens' Assembly on Property Taxes recommends imposing interstate highway tolls to generate up to $950 million annually, which would fund the repeal of local motor vehicle taxes.
• The group proposes a state income tax surcharge on millionaires, noting that 76% of residents support such a measure, despite opposition from both Democratic and Republican gubernatorial candidates.
• The report suggests the state should assume the full cost of special education services, currently shared with local municipalities, and create incentives for school regionalization to reduce costs.
• Legal barriers exist, as a 2018 constitutional amendment prohibits redirecting transportation fund revenues, requiring a potential amendment process that would not reach voters until 2028.
• Additional recommendations include shifting sales tax receipts from prepared meals and hotels to municipalities and increasing the Education Cost Sharing program to account for inflation.

Background

Connecticut has long struggled with high property taxes, with lifetime bills in the Northeast significantly higher than in other regions. Previous attempts to implement tolls under Governor Ned Lamont in 2019 failed, and the state has relied on aggressive budget caps to build surpluses, which critics argue have come at the expense of education and municipal aid. The current proposals build on these historical challenges, aiming to address the complex and inequitable nature of the state's tax system.

Why it matters

The proposed reforms could significantly impact Connecticut's fiscal landscape by reducing the burden on local property taxpayers and addressing income inequality. If implemented, the changes could alter the state's budgeting practices and potentially influence national discussions on tax equity and infrastructure funding. However, the political and legal obstacles suggest that these reforms may face substantial resistance, making their implementation uncertain.

What to watch

The next steps involve legislative and public debate on the assembly's recommendations. If the tolling proposal gains traction, it may require a constitutional amendment to bypass the 'lock box' restriction on transportation funds. Meanwhile, the state must decide whether to assume the full cost of special education services and implement incentives for school regionalization. The outcome of the upcoming gubernatorial election may also influence the likelihood of these reforms being adopted.