Federation of Connecticut Taxpayer Organizations

At this time of year, we have an opportunity to consciously reflect upon our forefathers and their sacrifices made in an effort to establish a country free from religious persecution, government suppression and excessive taxation.

As we reflect upon all that we have to be thankful for, we recognize Thanksgiving as an American heritage and symbol which began in October, 1621 at Plymouth as the� �Pilgrims celebrated their first harvest, and which continued throughout subsequent years. �During the American Revolution in the late 1770's, the Continental Congress proposed a national thanksgiving.�� Thanksgiving was ultimately proclaimed an annual national holiday in 1863 by then President Abraham Lincoln. ��

Our forefathers were men and women of conviction who worked hard and fought hard for a government which they would control.� They knew the effects of excessive taxation, and on December 16, 1773, in an act of defiance, set the stage in history for what came to be known as the Boston Tea Party.�� http://www.let.rug.nl/usa/E/teaparty/bostonxx.htm

Today, there is a taxpayer revolution growing throughout this country driven by� excessive taxation and eminent domain abuse.� Law abiding citizens who cannot continue to pay exorbitant property taxes are losing their homes as tax liens are sold by municipalities.��

The Federation has produced a one hour tape to be shown in half hour segments on local cable programs.� We encourage you to write to us to obtain a copy of this tape to be shown to taxpayers in your towns which will illustrate why their taxes are increasing and how they can join with others to lessen their tax burden.

On December 20, 2006, myself and Mike Guarco, the Chairman of the Finance Board of Granby and a leader of The Connecticut Municipal Consortium for Fiscal Responsibility will be appearing before the Unfunded Mandate Committee as formed by Governor Rell.� We encourage you to attend this meeting which we will post on FCTO�s website.� Recognizing that town and board of education employee salaries, wages, and pensions account for 70% to 90% of local budgets throughout the 169 towns in Connecticut, we seek reform of Binding Arbitration and Prevailing Wage laws.�� These two unfunded mandates are the catalyst to increased property taxes year after year.��

Over the course of the next few weeks, FCTO will issue a letter to local municipal leaders urging them to control the costs of union contracts which are the driving force of local budgets.�� We will encourage them to join with Mike Guarco and all elected municipal leaders who comprise The Connecticut Municipal Consortium for Fiscal Responsibility.� To learn more about the Consortium, visit the following website �. http://ctact.org/default.asp?callcontent=yes&filename=GuarcoConsortium.htm%20%20%20&location=Home&buttonname=Home

As FCTO and officials within the Consortium work to control your property taxes, we need your help.� If your town is not a member of the Consortium we encourage you to contact us.� If you are not a member of FCTO, we encourage you to join us.�

We ask that you become active participants in your government.� If there is not a taxpayer group within your community, consider forming one.� FCTO will provide you with the tools to do so.�

The following is a typical email sent to FCTO regarding the increase in property taxes, as well as a proposal to address the property tax issue.

Tax Talk is your publication.� It is a publication for the concerned taxpayer to speak out, to bring their ideas, and to network.� Participate in Tax Talk by sending your thoughts to FCTO at fctopresident@aol.com .� Please include your name and telephone number in the heading so that we know where the email originated from prior to opening.� Thank you.�

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The following is a typical letter recently received by FCTO as property taxes increase.� FCTO will communicate with this person and put them in contact with a FCTO Board Member in that area.� We will write directly to the municipal leaders in New Haven to tell them their constituents cannot continue to pay exorbitant property tax increases and to understand this fact when negotiating union contracts.

FCTO is working hard at the State level to control your property taxes which are being driven by State Mandates.� As meetings are scheduled by the State legislature on tax related issues, we will post the Agenda, date, time and location of the meeting on our website. We encourage all concerned property taxpayers to attend these State Legislative meetings.�

We also encourage all local property taxpayers to attend local Legislative/Town Council meetings and speak out against escalating property taxes, and for reform to State Binding Arbitration and Prevailing Wage Laws.� Tell your municipal leaders that you cannot continue to pay exorbitant employee salaries, healthcare and pension costs which account for 70% to 90% of local budgets.��

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Dear Ms. Kniep, We in New Haven just got our new assessments of our homes, which have once again gone way up. In addition, this past year the mill rate was raised; and it looks like they are planning to do it again, thus gouging us at both ends. ..... The situation is appalling.�� Thank you for your time.

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FCTO has spoken out against the current property tax system wherein we are taxed on our properties as unrealized capital gains.� One Connecticut taxpayer has forwarded to us the following Massachusetts legislation to control property taxes.� Do you have a proposal or a concern on the property tax issue.� Write to FCTO at fctopresident@aol.com

WHAT IS PROPOSITION 2� ? - Concerned about the unbridled growth of the property tax, Massachusetts voters in 1980 approved a ballot initiative known popularly as Proposition 2�. The law (MGL 59:21C), which took effect in fiscal year 1982, derives its name from two sources. First, it sets an absolute tax levy limitation (known as the "primary" or "overall" limit) at 2� percent of the townwide assessed valuation. Second, the law also limits the annual growth in the tax levy to 2� percent per year. This is known as the "secondary" or "annual" limit.

The most significant requirement of Proposition 2� is the limit placed on municipalities in levying real and personal property. The levy ceiling, the maximum amount of revenue that a municipality can raise through the property tax, is limited to no more than 2� percent of the total full and fair cash value of real and personal property. When Proposition 2� was approved, many cities and towns were taxing above the 2� percent limit. The new law required communities exceeding the limit to roll back their tax levies 15 percent a year until they met the 2� limit.

A number of other important provisions of Proposition 2� affect local financial administration:

A 2.5 percent annual limit on any other governmental unit's assessment on a community.
The repeal of school committees' fiscal autonomy and of compulsory and binding arbitration for public employees.
Prohibition of unfunded state mandates.
A limit of twenty-five dollars per thousand dollars of value on motor vehicle excise.
A rental deduction on one's personal state income tax.

All of these provisions are designed to complement the major levy limit restriction, and provide municipalities with some leverage to operate under the fiscal limitations of Proposition 2� .

Although Proposition 2� places significant restraints on the revenue - raising capacity of municipalities, the law does contain provisions granting cities and towns flexibility in raising their levy limits to maintain local services. There are a number of ways in which the levy limit can be increased:

There is an automatic 2.5 percent increase in each community's levy limit over the prior year's limit. The term, unused levy limit capacity, refers to the levy amount that can be raised in excess of the actual levy without requiring a vote to override it.
A municipality can take advantage of growth in the tax base by increasing its levy limits by an amount equal to the prior year's tax rate times the value of new property. This provision covers new construction as well as structural additions and improvements, which increase a property's value.
A community can pass a general override by a municipal referendum to increase its levy limit permanently.
A municipality can temporarily exceed its levy limits by passing one of three other types of overrides: exclusion of payments on specific debt issues, exclusion of capital outlay expenditures, or an elimination of required cuts (mandates). In general, override votes to exclude new debt issues have been successful, while override votes to raise the limit for general operating purposes have not.

Without these options, cities and towns would find it increasingly more difficult to maintain local services from year to year. Municipalities would have to rely on dramatic increases in state aid or would have to develop new fees and charges to pay for the delivery of services. With municipal costs ever rising, increased revenues are a must for cities and towns in the commonwealth to maintain financial stability.

An overview of Proposition 2� would be incomplete without mentioning its "underride" provision. The underride allows cities and towns to reduce their annual levy limits. The law states that municipalities can limit the total amount of property taxes assessed to a level less than the maximum of 2.5 times their full and fair cash value. A majority of the local appropriating authority or a local initiative petition is required to place this question before the voters, who must then approve it by a majority vote.