A newly formed Connecticut Citizens’ Assembly on Property Taxes is pressing state officials to adopt a suite of revenue measures that could reshape local taxation. The 98‑member panel, created last July by the Connecticut Conference of Municipalities and researchers from Yale and the University of Connecticut, released a report Monday outlining its recommendations.

Revenue ideas: tolls and a surcharge on high earners

The assembly argues that Connecticut’s property‑tax system is “complex, inequitable and in desperate need of reform.” To address the shortfall, it proposes reviving an interstate‑highway tolling plan similar to the one Gov. Ned Lamont floated in 2019. The group estimates that tolls could generate as much as $950 million each year, with roughly 40 % of that revenue coming from out‑of‑state drivers.

In addition, the panel recommends a one‑percentage‑point surcharge on state income for the highest earners. The surcharge would apply to individuals making more than $250,000 and couples earning over $500,000, potentially raising another $420 million annually. The revenue would be earmarked for two primary goals: (1) a full repeal of the municipal motor‑vehicle tax, and (2) covering the growing cost of special‑education services that currently fall largely on local budgets.

How the money would be used

According to the report, the toll receipts would be directed to municipalities to keep local budgets whole, preventing a shift of the burden back onto property owners, businesses, or equipment owners. The assembly notes that Connecticut voters approved a constitutional “lock‑box” amendment in 2018 that bars the diversion of Special Transportation Fund (STF) revenues to non‑transportation purposes. Overturning that provision would require a new constitutional amendment, which could not appear on the ballot until 2028.

Even if the toll revenue remains locked in the STF, the assembly argues that the fund’s existing fuel and sales‑tax receipts could be reallocated to finance the repeal of the motor‑vehicle tax, freeing up local revenue streams.

Political and legal hurdles

The proposals face steep opposition from both parties. Both Gov. Ned Lamont, a Democrat, and GOP gubernatorial nominee Ryan Fazio have publicly opposed raising the state income‑tax rate on high earners, warning that such moves could drive wealthier residents out of the state. The Republican minority in the General Assembly and many moderate Democrats share that concern.

Legally, federal law requires toll revenues to be used for transportation purposes, meaning any diversion would need congressional or state‑level legislative changes. The assembly acknowledges that navigating these statutes, as well as the constitutional lock‑box, would be a lengthy process.

Public sentiment and fiscal context

A poll commissioned by The Connecticut Project, a nonprofit research group, found that 76 % of respondents support “increasing taxes on millionaires and billionaires,” indicating broad public appetite for the revenue ideas. The poll’s methodology, sample size, and margin of error were not disclosed in the source.

Connecticut’s fiscal landscape adds urgency to the discussion. Since 2017 the state has imposed aggressive budget caps, generating surplus reserves averaging more than $1.8 billion annually—about 8‑9 % of the General Fund. Those surpluses have been used to build cash reserves and reduce pension liabilities, which still exceed $30 billion.

Special‑education costs and school regionalization

Local school districts currently shoulder roughly two‑thirds of the $3.3 billion annual cost of special‑education services. The assembly recommends that the state assume the full expense, a shift that would require substantially more revenue than the proposed high‑income surcharge alone can provide.

Beyond financing, the panel suggests encouraging school regionalization to lower education costs. Rather than mandating consolidation, it proposes creating a new state commission to develop incentives for districts that choose to combine services.

Next steps

To move forward, the assembly urges lawmakers to begin the constitutional amendment process, explore legislative pathways for toll implementation, and consider the high‑income surcharge as part of a broader tax‑fairness strategy. While the proposals are ambitious, supporters argue they represent a data‑driven effort to relieve property‑tax burdens on Connecticut families while addressing long‑standing inequities in the tax system.

Original reporting: The Connecticut Mirror — read the source article.