Special Tax Districts: Connecticut’s Abandoned Municipal Opportunities

From its inception, Connecticut incorporated into its very fabric the predominance of the geopolitical unity of the “city” within the state body. Of the eleven fundamental Orders, nine place the authority to accomplish the will of Divine Providence in the cities. The Eighth Order invokes the supremacy of cities no less than five times.

Dan Smolnick

The state constitution of 1818 ensured that political authority was not vested in the people by providing for one-year terms for the governor, lieutenant governor, all other constitutional agents, as well as members of the the general Assembly. This necessarily kept government at the state level weak and subject to the will of the cities. He continued the Jeffersonian principle that local governments improve democratic practices.

The 1965 constitution included, among other things, an element authorizing the adoption of a law on autonomy, which the General Assembly had already adopted eight years earlier. In Connecticut, Home Rule allows lawmakers to allow cities to have a wide range of powers, under each city’s charter. An important source of this authority was promulgated in Chapter 104 of the General Statutes and gives cities the authority to establish special districts responding to such issues as water, sewers, fires, harbors, beaches, municipal lighting and improvements.

These special tax districts ensure efficiency and fairness in the administration of municipalities, especially cities with localized assets such as beaches, bustling business districts or condominium complexes. The establishment of a special district relieves the administrative responsibility of the general municipal administration and distributes the costs of providing the associated services to those who will benefit the most. In addition, the management of the district is entrusted to an elected council whose members’ interests are geographically linked to the district. Through the use of the special district scheme, the city’s overall property tax base is not constrained to pay for an asset that most residents make little or no use of. In addition, the property around which the district is formed receives more consistent management attention than if it were relegated to an agenda item of a municipal commission whose mandate includes all of the city’s classified property. the same way.

Due to their functional autonomy from the government of the city in which they are established and their power to promulgate rules and collect taxes from residents of the district, special tax districts exist as their own limited governments.

The Census Bureau has, every five years since 1957, maintained and continuously updated a master government mailing list using the Government Units Survey. The GMAF identifies each special district in the country. This data, no coincidence, is not collected or maintained by the State of Connecticut. Special districts are independent sub-municipal government units created for a limited and specific purpose, and each year new districts are created and existing ones come to an end.

Records indicate that Connecticut’s first special district, the Borough of Bridgeport (then part of the City of Stratford), was established in 1800, followed a year later by the establishment of the Borough of Stonington. From 1962 to 1997, the number of sub-municipal governments in Connecticut increased by over 46%. From 2007 to 2017, this growth reversed and the number of sub-municipal governments declined in our state while increasing nationally.

Connecticut experienced the nation’s eighth largest percentage reduction in local government units for 2007-2017, with a loss of 24 special districts.

For the more recent period of 2012-2017, the special wards lost in Connecticut were primarily associated with fire protection (decrease by seven), parks and recreation (decrease by three), water supply (decrease by two), highways and housing and community development (each with a decrease of one).

Perhaps the key to explaining the continued downward trend in the number of sub-municipal governments in Connecticut is the operative language in the law requiring that districts be “entirely within a city and have the power to do so. credits or levy taxes ”.

Around 2007, taxes began to attract populist opposition. Anti-government sentiment accelerated in December 2007 when Representative Ron Paul launched his presidential campaign on a platform to oppose taxes and accelerated further in 2008 when the subprime mortgage crisis that began in 2006 resulted in a stock market crash and recession. . The resulting sentiment acted as a brake, among some voters, to establishing anything that looked like an additional government or another layer of taxes.

The downward pressure on sub-municipal government was not nationwide, however.

Only 20 states lost local government entities during the 2007-2012 period and also lost more for an additional five years. It is interesting to note that, as among the states comprising those that lose the ten largest amounts (in percentage) of local government units, all except Connecticut and Rhode Island are among the most ideologically conservative.

Overall, the country gained 599 sub-municipal government units over the period 2007-2017, or around 0.7%. The loss of 3.7% of its units in Connecticut therefore represents a significant departure from the national trend.

Our cities depend on autonomous revenues for about 88% of their budget. The move away from the deployment of sub-municipal governments is putting upward pressure on city-wide rates per mile, as the underutilization of more efficient mechanisms for the delivery of government services forces cities to back down. rely on general-purpose sources of income. Cities should take a fresh look at how they can improve the efficiency of government service delivery and more appropriately distribute the impact of local taxes through the use of special district government entities.

Dan Smolnik is a tax lawyer and member of the Hamden Economic Development Commission. The opinions expressed are his.


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About Ray Coulombe

Ray Coulombe

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