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Connecticut's Coming Crash

Summary

$1 billion of one town's property value lost in decade-long rout.

Half the town is in for a surprising tax hike in the New Year.

Critical moment for staying competitive before it is too late.

What happens when a town’s revenue base declines for a decade while the government goes on a spending spree?

We’re about to find out.

Home Value Rout

For revenue, New Canaan’s government relies on taxing property. That property is getting reassessed much lower—with a proposed assessment decline of more than $500 million representing a fair market value loss of almost $750 million. On average, more expensive homes have declined the most, with the assessment of homes previously assessed at between $2 million and $5 million declining by 10 percent. At the same tax rate, those property owners will pay for a smaller percentage of government spending as a result of that decline. A majority of New Canaan homes were previously assessed at under $1 million. Their new assessment shows an average 2 percent decline. These 4,200 New Canaan property owners are about to get hit with a tax hike necessary to pay their greater share of the tax burden combined with the greater government spending. Many rates will increase by more than 10 percent.

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