Connecticut Proposes Tolls and Millionaire Tax for Property Tax Relief

You have likely seen your property tax bill climb. You feel the sting when your town’s mill rate ticks up again. Now, a citizens’ group in Connecticut has a direct and controversial plan to fix it. They propose financing property tax relief with two sources other states envy: interstate highway tolls and a new tax on millionaires. The political fight over this idea will define the state’s next decade.

The Connecticut Citizens’ Assembly on Property Taxes wants to revive a tolling plan similar to Governor Ned Lamont’s failed 2019 proposal. They estimate tolls on interstates could raise $950 million annually. This money would directly fund the repeal of your local car tax. That levy brings in a comparable $950 million for towns each year. The group’s logic is stark. If the state sends toll revenue to municipalities, your town would not need to replace lost car tax money by raising taxes on your home or business. The assembly notes about 40% of toll revenue would come from out-of-state drivers. Connecticut residents would get all the benefit of a canceled tax.

The political and legal barriers are immense. State lawmakers balked at tolls in 2019 and again in 2020. Federal law requires toll money be used for transportation. Connecticut voters also passed a constitutional “lock box” amendment in 2018. It prohibits moving Special Transportation Fund dollars, where toll revenue would land, to other uses like local tax relief. Unlocking that box would require a new constitutional amendment. It could not reach voters until 2028.

Tolls are only one part of the proposal. The assembly also suggests a state income tax surcharge of at least 1% on high incomes. They argue this could reverse worsening inequality. A 2025 Department of Revenue Services study found Connecticut’s tax system is highly regressive. The lowest earning 10% of workers lost 40% of their income to state and local taxes in 2022. The highest earning 10% lost just 10.6%. Public sentiment appears to support a change. A recent poll by The Connecticut Project found 76% support for increasing taxes on millionaires and billionaires.

Governor Lamont and his Republican challenger Ryan Fazio both oppose raising income tax rates on high earners. They argue it would prompt wealth flight. The Republican minority in the General Assembly and many moderate Democrats also oppose such a tax. A 2025 Democratic proposal for a surcharge on singles earning over $250,000 was left out of the final budget.

The group’s most expensive recommendation involves schools. Cities and towns now pay about two thirds of the $3.3 billion annual cost for special education services statewide. The citizens’ assembly recommends the state assume the full cost. This would require billions in new annual spending. It would force a radical shift in the state’s fiscal policy. Since 2017, Connecticut has used strict budget caps to generate large surpluses. These surpluses average over $1.8 billion a year. The state uses them to pay down pension debt, which still exceeds $30 billion. Critics argue this aggressive saving has come at the expense of education funding and municipal aid.

Other recommendations aim to ease town budgets. The assembly suggests shifting half of the $110 million from a 1% sales tax on prepared meals back to municipalities. It proposes a new commission to craft incentives for school districts to regionalize services. It also wants an independent council to estimate the cost of any new state mandates on towns before they pass.

• Finance property tax relief with tolls
• Implement tax on millionaires
• Revive tolling plan similar to 2019 proposal
• Assume costs for special education
• Shift sales tax revenue back to towns
• Create incentives for regionalizing school services

These proposals are a direct challenge to Connecticut’s current political consensus. They target two major revenue sources politicians have long avoided. They question a decade of fiscal policy focused on debt repayment over local aid. The debate will test what residents value more: tax relief for themselves or the current political promises to out of state drivers and the wealthy. The citizens’ assembly has drawn a clear line. The response from candidates and lawmakers will show you where the real power lies.