FAQs: Tax Abatements and Education Finance

Many municipalities offer incentives, such as tax abatements, which provide a reduction or elimination of property taxes over a specific period of time to real estate developers to provide more housing options or businesses to provide more employment options and future revenue. These incentives are utilized to entice companies to create new, or improve on existing, economic developments.

Since property tax revenue remains the largest source for education funding in Connecticut (approximately 58 percent), tax abatements raise questions about the impacts of incentives on communities’ abilities to fund their local public schools.

This document helps address some of those questions by providing answers to frequently asked questions regarding tax abatements, including what tax abatements are and how they might be utilized.