SB 511 — AN ACT ESTABLISHING MUNICIPAL GROWTH DIVIDEND PAYMENTS.
Last action — FILE NO. 655
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✓Introduced
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2In Committee
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3Passed Senate
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4Passed House
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5To Executive
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6Enacted
This bill is in committee in the Senate. Introduced March 20, 2026. It must pass committee before a floor vote.
Next likely step: a committee vote, then a floor vote in the Senate.
Prognosis
Where this bill stands today.
Odds of enactment
LowHow often bills like it became law.
Not enough signal yet to read this bill's trajectory — we surface a likelihood only once there's real movement (stage, sponsorship, committee, or votes) to point to.
Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.
Bill Text
What changed in the latest version
170 added · 12 removedPlain-language change summary
In the updated version of Bill SB 511, some specific language was removed, likely making the bill clearer and more straightforward. The key change involved the certification requirement for the municipality’s legislative body regarding certain funds. This change matters because it may streamline administrative processes for local governments, potentially resulting in quicker access to funds and fewer bureaucratic hurdles.
Senate General Assembly SubstituteFile Bill No.
511655 February Session, 2026 ANSubstitute ACTSenate ESTABLISHINGBill MUNICIPALNo. GROWTH DIVIDEND PAYMENTS.
511 Senate, April 16, 2026 The Committee on Finance, Revenue and Bonding reported through SEN.
FONFARA of the 1st Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.
AN ACT ESTABLISHING MUNICIPAL GROWTH DIVIDEND PAYMENTS.
(2) "MAR baseline" means the amount of the municipally attributable revenuesSB511 of/ aFile municipalityNo. for the fiscal year ending June 30, 2026;
655 1 sSB511 File No.
655 revenue of a municipality for the fiscal year ending June 30, 2026;
The account shall contain any moneys required by law to be LCOdeposited 1in ofthe 5account. Substitute Bill No.
511 deposited in the account.
and (B) For any municipal development project that is intended to supportsSB511 municipal/ economicFile growthNo. and for which the state has provided instrumental capital, the municipality shall receive, in lieu of the distribution under this subsection, fifty per cent of the municipal growth dividend attributable to such project and the state shall receive fifty per cent of such growth dividend until the full amount of the state capital expenditure has been recouped.
LCO655 2 ofsSB511 5File Substitute Bill No.
511655 (2)support Anymunicipal distributionseconomic receivedgrowth byand afor municipalitywhich pursuantthe tostate thishas sectionprovided instrumental capital, the municipality shall bereceive, usedin bylieu of the municipalitydistribution tounder providethis subsection, fifty per cent of the municipal servicesgrowth individend accordanceattributable withto such project and the provisionsstate ofshall subsectionreceive (e)fifty per cent of thissuch sectiongrowth ordividend tountil reducethe full amount of the municipality'sstate millcapital rate,expenditure orhas both.been recouped.
(2) Any distributions received by a municipality pursuant to this section shall be used by the municipality to provide municipal services in accordance with the provisions of subsection (e) of this section or to reduce the municipality's mill rate, or both.
For the purpose of providing municipal services, a municipality may use the moneys in such fund as a one-time expenditure or as an ongoing expenditure, providedthelegislative bodyofthemunicipality certifiesthat suchsuchfund fund is sufficiently capitalized to sustain such ongoing expenditure for not less than three fiscal years.
(b) (1) The state budget act passed by the legislature for funding the expenses of operations of the state government in the ensuing biennium shall contain a statement of estimated revenue, based upon the most recentsSB511 consensus/ revenueFile estimateNo. or the revised consensus revenue estimate issued pursuant to section 2-36c, itemized by major source, for each appropriated fund, and supplied by the joint standing committee of the General Assembly having cognizance of matters relating to state finance, revenue and bonding.
655 3 sSB511 File No.
655 recent consensus revenue estimate or the revised consensus revenue estimate issued pursuant to section 2-36c, itemized by major source, for each appropriated fund, and supplied by the joint standing committee of the General Assembly having cognizance of matters relating to state finance, revenue and bonding.
LCO(A) 3Such itemization shall include the estimate for each major component of 5the Substitutepersonal Billincome No.tax imposed pursuant to chapter 229 as follows:
511 (A) Such itemization shall include the estimate for each major component of the personal income tax imposed pursuant to chapter 229 as follows:
[(3)] (5) The total estimated revenue for each fund, as adjusted in accordance with this section, shall not be less than the total net appropriations made from each fund plus, for the fiscal year ending JunesSB511 30,/ 2014,File andNo. each fiscal year thereafter, the amount necessary to extinguish any unassigned negative balance in each budgeted fund as addressed in the most recently issued annual report of the Comptroller published in accordance with section 3-115.
On655 or before July first of each fiscal year, the joint standing committee of the General Assembly having cognizance of matters relating to state finance, revenue and bonding shall, if any revisions in such estimates are required by virtue LCO 4 ofsSB511 5File Substitute Bill No.
511655 ofJune legislative30, amendments2014, toand theeach revenuefiscal measuresyear proposedthereafter, bythe saidamount committee,necessary changesto inextinguish conditionsany orunassigned receiptnegative ofbalance newin informationeach sincebudgeted thefund originalas estimateaddressed wasin supplied,the meetmost andrecently reviseissued suchannual estimates and, through its cochairpersons, report toof the Comptroller anypublished suchin revisions.accordance with section 3-115.
On or before July first of each fiscal year, the joint standing committee of the General Assembly having cognizance of matters relating to state finance, revenue and bonding shall, if any revisions in such estimates are required by virtue of legislative amendments to the revenue measures proposed by said committee, changes in conditions or receipt of new information since the original estimate was supplied, meet and revise such estimates and, through its cochairpersons, report to the Comptroller any such revisions.
-LCO LCOsSB511 5/ ofFile 5No.
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655 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.
In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.
Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.
OFA Fiscal Note State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $ Policy & Mgmt., Off.
GF - Cost Potential Potential Resources of the General Fund GF - Revenue Loss None None Note:
GF=General Fund Municipal Impact:
Municipalities Effect FY 27 $ FY 28 $ All Municipalities Revenue Gain None None Explanation The bill has a significant state and municipal revenue impact, described below, and reflected in the "out years" table at the bottom of the fiscal note.
The bill expands municipal revenue sharing to include 0.5% of state revenue from the:
1) withholding portion of the personal income tax;
2) corporation business tax, and 3) the General Fund's remaining portion of the sales and use tax.
For reference, 0.5% of the aggregate amount of these revenue streams is projected to be $88.2 million in FY 29.
Under the bill, the state revenue would begin to be set aside in FY 30 and distributed to municipalities beginning in FY 31 as municipal growth dividends.
The municipal growth dividend amounts per municipality would be 1By law, 0.5 of the 6.35 general sales tax (equal to 7.87% of the total rate) is shared via the Municipal Revenue Sharing Fund.
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sSB511 / File No.
655 6 sSB511 File No.
655 determined according to each municipality's respective growth from a baseline determined by the Department of Revenue Services.
There is a potential cost to the Office of Policy and Management beginning in FY 27 to the extent additional resources are necessary to (1) manage the new Municipal Growth Account, and (2) submit a report annually beginning November 1, 2030.
The bill results in a revenue gain to municipalities beginning in FY 31 that is dependent on the funds available and if the municipality meets certain requirements.
The Out Years State Impact:
Agency Affected Fund-Effect FY 29 $ FY 30 $ FY 31 $ Policy & Mgmt., Off.
GF - Cost Potential Potential Potential Resources of the GF - Revenue None 88,200,000 90,600,000 General Fund Loss Note:
GF=General Fund Municipal Impact:
Municipalities Effect FY 29 $ FY 30 $ FY 31 $ All Municipalities Revenue Gain None None 88,200,000 sSB511 / File No.
655 7 sSB511 File No.
655 OLR Bill Analysis sSB 511 AN ACT ESTABLISHING MUNICIPAL GROWTH DIVIDEND PAYMENTS.
SUMMARY This bill establishes a revenue sharing program that diverts a portion of state revenue from income, sales and use, and corporation business taxes into a new statewide municipal growth account and requires the Office of Policy and Management (OPM) to disburse the funds as “municipal growth dividends” to eligible municipalities (towns, cities, consolidated towns and cities, and consolidated towns and boroughs).
Under the bill, these dividends start in FY 31 and are generally tied to the amount of this tax revenue for a given year that the Department of Revenue Services (DRS) determines is attributed to each municipality compared to that amount for FY 26 (the “municipally attributable revenue (MAR) baseline”).
For municipalities that have received certain state capital funds to support a municipal development project, the dividend is instead (1) tied to the amount of the specified tax revenue attributable to the project and (2) split with the state.
Starting withFY 30, thebill requires (1) the state treasurer to annually transfer the total amount of municipal growth dividends for all municipalities to the statewide municipal growth account and (2) consensus revenue estimates to include a line item, designated as the municipal growth dividend, reflecting the estimated amount of this transfer.
(Consensus revenue estimates are the basis for the governor’s proposed budget and the revenue statement included in the budget act the legislature passes.) Under the bill, the statewide municipal growth account is a separate, nonlapsing account that contains any money required by law to be deposited into it, including any investment earnings credited to the account.
Starting by November 1, 2030, the OPM secretary must annually sSB511 / File No.
655 8 sSB511 File No.
655 report to the Finance, Revenue and Bonding and Planning and Development committees on (1) each municipality’s MAR for the applicable fiscal year and (2) any municipal growth dividends distributed.
EFFECTIVE DATE:
October 1, 2026 MUNICIPALLY ATTRIBUTABLE REVENUE The billrequiresDRS to determine, andprovidetoOPM, the(1)MAR baseline for each municipality by November 1, 2028, and (2) amount of each municipality’s MAR for each fiscal year starting with FY 30.
Under the bill, a municipality’s MAR is the sum of the following:
1.
sales and use tax revenue attributable to sales made at physical business locations in the municipality;
2.
the withholding portion of the personal income tax attributable to wages earned at physical places of employment in the municipality;
and 3.
corporation business tax attributable to business activity occurring within a physical nexus in a municipality.
(The bill does not define “physical nexus.”) MUNICIPAL GROWTH DIVIDENDS Amounts Starting with FY 31, the OPM secretary must annually distribute municipal growth dividends to municipalities that have MAR for the preceding fiscal year that equals or exceeds their MAR baseline.
These dividends must generally equal 0.5% of each municipality’s MAR for the preceding fiscal year.
The exception is for municipalities with municipal development projects designed to support municipal economic growth that received “instrumental capital” from the state.
(The bill does not define municipal development projects or instrumental capital for these purposes.) In these cases, instead of receiving 0.5% of its MAR for the preceding fiscal year, the municipality receives a municipal growth sSB511 / File No.
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655 dividend attributable to the project only.
The dividend is split, with half going to the municipality and half going to the state, until the state recoups the full amount of its capital expense in the project.
If a municipality’s MAR for a fiscal year is less than its MAR baseline, it receives no municipal growth dividend distribution for that year.
Required Uses Under the bill, each municipality must set up a municipal revenue stabilization fund and deposit their municipal growth dividends in the fund.
They may use the dividends to (1) reduce their mill rates;
(2) pay for municipal services, as allowed under the bill;
or (3) do both.
Municipalservicesfundedwiththedividendsmayeitherbeone-time expenditures or on-going expenditures, but the latter is allowed only if the municipality’s legislative body certifies that the fund is sufficiently capitalized to sustain the expenditure for at least three fiscal years.
BACKGROUND Law on Sourcing Revenue to Municipalities A 2025 law requires DRS, starting with FY 26, to track and record the source of state sales and use, personal income, and corporation business tax revenue to accurately and fairly attribute the revenue from each of these taxes to municipalities.
The commissioner must determine the sourcing method for attributing this revenue to each municipality, based on certain criteria established under the law.
Taxpayers paying these taxes must provide disaggregated information and any other data the commissioner requests to carry out these requirements.
Annually, starting by October 31, 2026, the commissioner must post on DRS’s website the amount of revenue from each of these taxes attributed to each municipality for the applicable fiscal year (PA 25-168, § 391, codified at CGS, 2026 Supp., § 12-7e).
COMMITTEE ACTION Finance, Revenue and Bonding Committee Joint Favorable Yea 43 Nay 11 (03/30/2026) sSB511 / File No.
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Action History
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FILE NO. 655
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SENATE CALENDAR NUMBER 418
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FAV. RPT., TAB. FOR CAL., SEN.
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RPTD. OUT OF LCO
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REFERRED TO Office of Legislative Research AND Office of Fiscal Analysis 04/15/26
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FILED WITH LCO
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Joint Favorable
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PUBLIC HEARING 0327
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REF. TO JOINT COMM. ON Finance, Revenue and Bonding
Sponsorship breakdown
Export CSV (upgrade) →0 sponsors · 0 co-sponsors · 187 not signed on
Sponsors (0)
None.
Co-sponsors (0)
None.
Not signed on (187)
187 members have not signed on to this bill.
Show all 187 →"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.
Subjects
Frequently asked questions
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- This bill is in committee in the Senate. Introduced March 20, 2026. It must pass committee before a floor vote.
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