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Bill

SB 511

AN ACT ESTABLISHING MUNICIPAL GROWTH DIVIDEND PAYMENTS.

2026 Regular Session

Connecticut bill would distribute state revenue growth dividends to municipalities to potentially reduce property taxes and support local services.

FILE NO. 655
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Bill Summary · SB 511

Legislative bill overview

SB 511 would establish a municipal growth dividend payment program in Connecticut that redistributes a portion of state revenue growth to municipalities. The bill creates a mechanism for towns to receive payments based on economic growth metrics, potentially funded through surplus state revenues or dedicated tax sources.

Why is this important

This proposal directly affects how state tax revenues are shared between state government and local municipalities, which impacts property tax rates, local services, and fiscal stability in towns across Connecticut. The outcome could influence whether municipalities can reduce property tax burdens on residents or expand local services without increasing local taxes.

Potential points of contention

  • Funding mechanism unclear: The bill's actual funding source—whether from state surpluses, new taxes, or budget reallocation—is not specified in the title, making fiscal impact difficult to assess
  • Distribution formula disputes: How "growth" is calculated and which municipalities benefit most could create winners and losers among towns, generating political conflict
  • State budget constraints: Redirecting revenue to municipalities reduces state funding for education, healthcare, and infrastructure that may already face budget pressures
  • Sustainability concerns: Payments tied to economic growth are volatile and may create municipal budgeting instability during recessions when payments decline

Compiled from official sources — confirm details with the bill’s official record.

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