Municipal Groups Warn Against Cutting Delinquent‑tax Interest Rate Without Implementation Details

Representatives of municipal organizations told the Planning and Development Committee that proposed reductions in the delinquent property‑tax interest rate warrant careful review and implementation design.

Randy Collins, associate director of policy for the Connecticut Conference of Municipalities, described current statutory interest practice as "1.5% a month" on overdue property tax principal and said it is applied as simple (non‑compounding) interest. Collins told members the rate serves as a prompt for timely payment and that municipalities rely heavily on property‑tax revenue to fund core services.

"We would be always willing to work with the committee on this bill," Collins said, but he warned that lowering the rate without a way to administer changes could shift costs to other taxpayers and make town budgeting more difficult. He and other municipal witnesses also said they are open to discussing prorated or graduated penalty schemes and to meet with tax collectors and finance officers to test implementation scenarios.

Tax collectors and municipal finance officials testified to practical details: some towns use lien assignments (selling delinquent liens to third parties) under strict local criteria, and one proposal would lower interest only after lien assignment. Fairfield tax collector David Kloszewski told the committee the 18% figure is often misunderstood by the public and that structures vary (30‑day grace period, noncompounding monthly application).

Legislators expressed concern for households in short‑term hardship (for example, after a bereavement) and asked municipal advocates whether mechanisms such as limited waivers or prorated first‑month penalties could be built in. CCM said it would consult tax collectors and government finance officers about practicability and fairness. No vote was taken; committee members asked proponents and CCM to continue negotiations on administrable alternatives.