While attractive at first blush, mandating a statewide cap on municipal property taxes - by itself - does not constitute property tax relief or reform. Yet, some state policy-makers would have you think otherwise.

A cap would have dire adverse consequences for towns and cities - unless municipal aid is increased significantly over time, the state prohibits new unfunded mandates on local governments, and smart, responsible growth principles are embraced.

There are various proposals for increased state aid being considered by the General Assembly, but none of them provides enough assistance to make it possible for municipalities to maintain, let alone increase, quality services if a property tax cap is imposed.

There is no question that the property tax is too high in too many of our communities. It's inherently unfair and regressive. It's a tax from yesterday that is no longer up to doing all of the jobs it's being asked to do today. But an artificial, state-mandated cap would make things worse.

The experience in Connecticut shows that aid to local governments isn't guaranteed - when budgets get tight at the state level, aid to municipalities is slashed. This causes a tax shift from the state level to the local level. In 2003 the legislature and the governor dramatically cut aid in several areas - in the middle of the budget year. In some areas, such as town aid for roads and the Pequot-Mohegan grant, the levels of aid have never returned to pre-2003 levels.

Most of the states with strict property tax caps allow local governments other sources of revenue. Connecticut's municipalities only have the property tax and the real estate conveyance tax.

When property tax growth is capped, local governments in other states have also turned to non-tax methods to finance vital services - for example, user fees go up and municipalities increasingly borrow money to pay for operations (causing a subsequent increase in interest on bonded indebtedness).

A tax cap would encourage towns to expand their non-residential grand lists (e.g., big box developments, etc.) - and discourage towns from attracting housing for families. This will exacerbate municipal competition for economic development. This is the opposite of what Connecticut should be doing as it seeks to embrace smart, responsible growth principles and to expand affordable housing opportunities across the state.

In states with tax caps - such as Massachusetts and California - disparities between municipalities get worse. Affluent communities are more likely to override the cap to get better public services. The residents of poorer communities simply cannot afford to do so. The result is that schools, parks, public safety and other services improve in wealthier towns and deteriorate in poorer places. The more affluent towns become more attractive places to live and do business, while the less affluent municipalities become less attractive.

Municipal cost-drivers don't go away because there's a property tax cap. For example, health insurance costs continue to rise, and utility prices are skyrocketing; and a cap doesn't control special education costs.

A cap can work but only with a number of important conditions being met.

The Connecticut Conference of Municipalities has presented a plan to the governor and the legislature that would increase funding to towns and cities over the next four to five years. It would greatly increase aid to education (the largest local expense) and fully fund payments in lieu of taxes for state-mandated property tax exemptions. It would restore and increase funding for the Pequot-Mohegan grant and town aid for roads. It would encourage cost-efficient regional cooperation in delivering services and planning for economic growth. It would prohibit the imposition of new unfunded state mandates on towns and cities.

At the end of that four- to five-year period, a temporary cap can be enacted that would ensure that the new state spending results in lower property taxes. It would have reasonable exceptions, similar to those proposed by Gov. M. Jodi Rell, and it would phase-out over four years to keep municipalities from falling behind as costs rise.

Remember, a property tax cap without significantly increased education and non-education municipal aid, land-use reform and relief from unfunded and underfunded state mandates is not real property tax relief or reform. Such a property tax cap is look-good, feel-good public policy that will deliver only pain to residential and business property taxpayers.

James J. Finley Jr. is executive director and CEO of the Connecticut Conference of Municipalities.