Governor M. Jodi Rell today proposed the first-ever property tax limit in Connecticut, establishing an iron-clad link between relief for struggling taxpayers and her plan for historic increases in state education aid.

The Governor's plan also sets tough new classroom achievement standards and spells out how cities and towns will ensure that the new state aid goes to improving student performance rather than administrative overhead.

"Our local taxpayers are in need of help," Governor Rell said. "They are straining under the weight of ever-increasing property taxes. Families who purchased their homes years ago and have long paid off their mortgages often cannot afford their annual property taxes. Young families are being priced out of certain markets or are feeling squeezed because of property taxes.

"There is going to be a property tax revolt in this state if real action is not taken - and the people will be right to revolt," the Governor said. "It is time for us to take action, just as we did on ethics and campaign finance reform and transportation. No more talk - no more studies. We're well aware of the need for property tax reform - as government leaders and as taxpayers ourselves. Now is the time to get it done."

In February, as Governor Rell outlined an unprecedented increase in state education aid, she stated plainly that the increases must be directly tied to property tax relief and higher performance in the classroom.

"The compelling need to transform our education system is all too evident," Governor Rell said. "You can see it in stark facts and figures: A decline in the percentage of students reading at or above grade level, from an anemic less than 60 percent to - still worse - less than 53 percent. The fact that 73 percent of adults in our own capital city read or write at less than a sixth-grade level. A dropout rate of more than 60 percent in the City of New London. These are startling, eye-opening statistics - all the more so in a state that just this week retained the coveted status of having the highest per capita income in the nation.

"The need for property tax reform is equally compelling," the Governor said. "Forty-three other states already have some form of property tax relief measure, and 29 of them have limits on increases in property taxes. Right now the state with the highest per capita property taxes in the country - New Jersey - has such a measure on its Governor's desk awaiting his signature. It is my sincere hope that Connecticut will soon have such a bill on my desk for my signature."

Under the plan outlined by the Governor today, municipal property tax increases will be limited to no more than 3 percent a year, beginning with city and town budgets that start July 1, 2008. The limit also applies to special taxing districts such as fire districts. There will be four exceptions to the limit:

• Grand List Growth: Town Grand Lists typically grow by 1.5 percent to 1.9 percent per year without special situations such as the development of a new subdivision, shopping mall or industrial site. Any growth in a municipality's Grand List over 1.5 percent - other than motor vehicles - may be added to the property tax increase for that year
• Debt Service: Expenses related to paying for capital projects are exempt from the limit, but only for the life of the bonds
• Override: The limit may be exceeded on a vote of two-thirds of the municipality's legislative body and a simple majority vote of residents
• Emergencies: The limit may be exceeded in the event of a natural disaster, fire or other emergency

To ensure that the new state education aid is used as intended, the Governor is proposing firm standards for local education budgets. Earlier this year she outlined a new schedule for school construction reimbursements for Connecticut municipalities ranging from 15 percent to 65 percent. Under her proposal, the same formula will establish the minimum increase in education spending.

If, for example, a town is eligible for 47 percent reimbursement from the state on its school construction costs, then its school budget must increase by at least 47 percent of the new state education aid it receives. Cities and towns can certainly spend more - and those districts identified as "needing improvement" will be required to spend more - but the proposal set a threshold for increased education spending.

At the same time, the increased state aid takes the pressure off local property taxes.

"Combined with the limit on annual increases - and my proposal to phase out the burdensome 'car tax' over the next five years - this will provide real relief to the hard-pressed taxpayers of Connecticut," Governor Rell said.

To improve classroom achievement, districts will be required to file annual plans outlining exactly how they plan to spend the state aid on direct help to students and teachers. Parents will receive annual reports from their districts showing how their student has performed over the years on Mastery Tests and other measures. And every school district in the state will receive a no-nonsense report on how its administrative spending has grown over the last 10 years - and how it stacks up against the statewide average.

"It's as simple - and as necessary - as that," the Governor said. "This is common sense - this is about where Connecticut stands today and where it wants to go. As Governor, I know how much our state can achieve. My job now - our job, as leaders of this state - is to make it happen."