House Appropriations Subcommittee Advances Bill to Phase Out Backfill

A subcommittee met Wednesday afternoon to discuss HSB 678, which phases out the property tax backfill payments to local and county governments. The Legislature put in place the backfill in 2013 as part of property tax reform to replace the reduction of revenue to local governments. Beginning in fiscal year 2018, the bill would reduce payments from approximately $150 million to $100 million. It would then reduce payments by $25 million each fiscal year from FY19 through FY21. Local governments would continue to receive $25 million in future years.

Several government representatives spoke against the bill. There were two main themes to the opposition. First, if the Legislature is going to begin eliminating the backfill, wait until state fiscal year 2020, as many cities and counties have already certified budgets for FY19. Second, the phase-out should be extended longer than four years. Others suggested changes to limit the property tax rollback for commercial and industrial from 10 percent to 5 percent.

Another idea offered was to stop the multi-residential rollback, which will eventually be taxed as the same rate as residential, and those dollars are not backfilled by the state general fund. House Appropriations Committee Chairman Pat Grassley (R-New Hartford) led the subcommittee and said the bill will advance, but he is willing to listen to ideas and suggestions from individuals as the legislation moves through the legislative process.