OLR Report 2011-R-0347 explains the different types of special taxing districts and the process for establishing them. It also gives (1) examples of tax districts established to maintain a lake, pond, or other watercourse and (2) a description of their functions.
The statutes authorize two types of local districts that can provide public services and levy property taxes to pay for them – special taxing districts and special services districts (SSDs). They specify their powers and duties, governance structure, and the process for creating and dissolving them. The property taxes both levy are in addition to those levied by their respective municipalities. The residents of an area within a town can form a special taxing district to perform a number of services, including provide police and fire protection, maintain roads, operate recreational facilities, provide street lighting, collect garbage, control flooding and soil erosion, provide water services, regulate land uses, and enforce the building code (CGS §§ 7-324 to 7-329).
Municipalities can also create SSDs on behalf of the property owners of an area (CGS §§ 7-339m to 7-339t). SSDs, also referred to as business improvement districts, have been most commonly used by larger cities to provide special services desired by specific areas, such as merchants desiring extra street cleaning, lighting, or trash pickup in a downtown shopping district.
The statutes specify the process for creating both types of districts. The process for forming a special taxing district begins with residents specifying its boundaries and petitioning the town to convene a meeting of voters in the proposed district. The residents may establish the district either at a special meeting called for that purpose or through a referendum. In either case, the district is formed if two-thirds of the people voting approve its petition (CGS § 7-325).
The process to form an SSD, on the other hand, formally begins when a town adopts an ordinance establishing the district. However, the initiative usually comes from property owners who desire extra public services and are willing to pay for them through extra property taxes. The ordinance takes effect only if the affected property owners vote within 60 days to approve it (CGS § 7-339p). The voting process varies depending on how the district is configured.
Lake associations organized as special taxing districts maintain lakes and provide other services to people who own property around the lake. We examined the charters and by-laws of six lake association districts. We can provide copies of these documents at your request. To varying degrees, all of them perform the following functions in their districts:
1. maintain and regulate the lake, beaches, swimming areas, and recreational facilities;
2. construct and maintain roads;
3. provide fire, police, or security protection; and
4. maintain flood or erosion control systems (e.g., dams, ditches, retaining walls, and waterfronts).
Most of the districts also perform a range of other functions. This includes (1) regulating parking, boating, and fishing; (2) lighting streets; (3) collecting garbage; (4) enforcing health regulations; and (5) abating nuisances (e.g., noise, roaming animals, and litter).
For more information, read the full report.
