This bill establishes a new grant program to help municipalities and the Department of Emergency Services and Public Protection pay for training police officers in impaired driving enforcement and drug recognition. The program allows these entities to receive funding either to reimburse costs for training already completed on or after July 1, 2026, or to pay for future training sessions. Additionally, the bill changes how certain cannabis taxes are distributed, directing five percent of tax revenue from fiscal years 2027 and 2028 onward into a dedicated account that will fund this training program. The Secretary of the Office of Policy and Management will manage the grants and submit annual reports to the legislature starting in 2028.
This bill creates a new state fund called the municipal growth account to distribute payments to Connecticut towns and cities based on their local tax revenue growth. Starting in fiscal year 2031, municipalities will receive a dividend equal to 0.5% of their tax revenue from sales, wages, and business activity within their borders, provided this amount exceeds their 2026 baseline. The funds must be deposited into a municipal revenue stabilization fund and can only be used for municipal services or to lower local tax rates. The state retains a share of these dividends for projects where it provided capital to support economic growth, and the Office of Policy and Management will track and report these distributions annually.
Sub-Topics
Revenue
Tags
Economic Development
HB 5205 would redirect a portion of the room occupancy tax collected by the state from short-term rental properties (like vacation rentals and Airbnb) to the municipalities where those properties are located. This change would provide local governments with new revenue they could use for community services, infrastructure, or housing programs. The bill amends existing tax law to require the state to allocate this portion of tax revenue directly to municipalities instead of retaining it at the state level. Currently, the state collects the tax, but under this bill, a share would flow directly to the local communities hosting these rentals.
HB 5407 creates a state reimbursement program for Connecticut municipalities that lose property tax revenue when veterans with a 100% service-connected disability rating (as determined by the U.S. Department of Veterans Affairs) receive property tax exemptions. Municipalities must annually submit certified claims by July 1 to the Office of Policy and Management, detailing lost tax revenue from this exemption. The state will review claims and pay municipalities by December 31 each year, starting January 1, 2027. This directly affects towns, cities, and boroughs that administer local property taxes.
SB 84 modifies state tax rules to implement the governor's budget. It primarily reduces the hospital tax rate for inpatient services from 6% to 4.1% starting July 2026, further lowering to 4% in 2030 and 3.5% after 2031. The bill also changes business tax deductions by disallowing 80% of Section 179 deductions (with a four-year recovery) and modifies depreciation rules for federal tax purposes. These changes directly affect hospitals and businesses claiming these specific tax deductions.
HB 5081 would create a new 4% personal income tax rate on earnings above $1 million annually for high-income earners. The revenue generated from this tax would be dedicated exclusively to funding education, higher education, child care services, and repairs for roads, bridges, and public transportation. This bill directly affects individuals with taxable income exceeding $1 million, as it imposes an additional tax rate on that portion of their income. The policy change shifts how state revenue from this specific tax bracket is allocated, requiring it to support these designated public services rather than general state funds.
HB 5174 would require the state to pay the city of New London $4 million annually to reimburse lost property tax revenue. This funding directly compensates the city for taxes not collected from the U.S. Coast Guard Academy, which is tax-exempt property under federal law. The bill amends state statute to establish this mandatory annual payment, ensuring the city receives consistent financial support. This policy change replaces revenue the city would have received if the academy paid local property taxes.
HB 5136 dedicates an additional 1% sales and use tax collected on meals sold by restaurants, caterers, and grocery stores to two specific purposes. The revenue must be distributed to the municipalities where the tax was collected and deposited into the state's Tourism Fund (under § 10-395b). This bill directly affects businesses selling prepared meals and the local governments receiving the redistributed funds. It creates a new, mandatory allocation for this tax revenue stream without changing the tax rate itself.
HB 5175 appropriates funds to hire 50 additional auditors for the Department of Revenue Services. The bill directs these auditors to help close the state's tax gap by collecting unpaid taxes and assessing applicable penalties and interest. It specifically allocates money from the General Fund for the 2026-2027 fiscal year to support this hiring effort. The bill directly affects the Department of Revenue Services' operations and aims to increase tax revenue collection.
SB 187 redirects the additional 1% sales tax collected on meals sold by restaurants, caterers, and grocery stores to the specific local municipalities where the tax was paid. This changes the current system by ensuring the tax revenue stays in the community where the sale occurred, rather than going to the state. The bill directly affects local governments, providing them with new funding from this tax stream without altering the tax rate or burden on businesses or consumers.
