Substitute Senate Bill No. 511 establishes a "state-wide municipal growth account" designed to distribute municipal growth dividends to municipalities based on their "municipally attributable revenue" (MAR), which encompasses total revenue from specific taxes linked to business activities and wages within each municipality. The bill mandates the Department of Revenue Services to determine the MAR baseline for each municipality by November 1, 2028, and to calculate the MAR annually thereafter. Beginning with the fiscal year ending June 30, 2031, municipalities will receive dividends equal to half a percent of their MAR from the previous fiscal year. Special provisions are included for municipalities with MAR below their baseline and those involved in state-supported development projects.

Additionally, the bill amends section 2-35 of the general statutes to create a new line item in the state budget for the municipal growth dividend, reflecting estimated transfers to municipalities. It requires municipalities to establish a revenue stabilization fund for the dividends received, which can be utilized for municipal services or to lower the mill rate. The Secretary of the Office of Policy and Management is tasked with annual reporting on the MAR and the dividends distributed. The effective date for these provisions is set for October 1, 2026.

Statutes affected:
Raised Bill: 2-35
FIN Joint Favorable: 2-35
File No. 655: 2-35