The legislature enacted the municipal revenue sharing program in 2015 by diverting a portion of sales tax revenue to a dedicated account to fund four new grant programs for municipalities.
MUNICIPAL REVENUE SHARING GRANT – GENERAL FUND
Municipal Revenue Sharing Grants from the General Fund are historically made pursuant to payment lists in the budget act for each biennium. For FY 2022 and FY 2023, a payment list was established in Section 35 of S.A. 21-15 that maintains the same funding that each of the five grantees received in FY 2021.
MUNICIPAL REVENUE SHARING GRANT – MRSA
Pursuant to subsection (b)(4) of section 4-66l as amended by P.A. 21-2, J.S.S. and section 448(b)(2) of P.A. 21-2, J.S.S., after the requirements in subsections (a) and (b) of section 448 of P.A. 21-2, J.S.S. are satisfied, moneys remaining in the Municipal Revenue Sharing Account (MRSA) will be distributed to municipalities according to the formula in subsection (e) of section 4-66l as amended by P.A. 21-2, J.S.S.
Each municipality’s grant is calculated based on attributes including mill rate and population. Applicable excess revenues deposited into MRSA between July 1 and September 30 must be distributed to municipalities on the following January 31, and such revenues deposited into the account between October 1 and June 30 must be distributed to municipalities on the following October 1.
The first potential payment date for MRSA Revenue Sharing Grants is January 31, 2022.
MUNICIPAL TRANSITION GRANT (Motor Vehicle Property Tax Grant)
Section 4-66l provides for motor vehicle property tax grants. Pursuant to C.G.S. section 12-71e , municipalities may not impose mill rates higher than 45 mills on motor vehicles. The municipal transition grant reimburses local governments for the foregone tax revenue resulting from this motor vehicle property tax cap.
A formula was established in Section 70 of P.A. 19-117 for Municipal Transition grants in FY 2020 and FY 2021. According to the formula, grants to municipalities in FY 2021 represent the difference between their motor vehicle property tax revenue at 45 mills and their motor vehicle tax revenue if their motor vehicle mill rate had been the same as their real and personal property mill rate, based on each town’s grand list in the assessment year commencing on October 1, 2017.
For FY 2022 and FY 2023, grants are paid pursuant to the same formula, which has been relocated in statute to subsection (c) of section 4-66l as amended by P.A. 21-2, J.S.S..
Grants are paid by August 1st.
For Information: Martin Heft, 860.418.6355, Martin.Heft@ct.gov