I got a bill from a collection agency from a city in another state
(Stamford CT) that I left in 1991 claiming that I owe personal
property tax on my car ($90.00) and penalties ($120.00). The
collection agency is harassing my by phone and so far the city tax
collector hs not answered my letter of inquiry on this matter.

To the best of my knowledge I owe this city no money. 

Must I pay this bill? 
Must I pay the penalties? 
What happens if I refuse to pay?

If you have an answering machine that records calls on your phone,
tell the collector that he is being recorded and that if he continues
to contact you about this that you are going to file a lawsuit against
him using the Fair Debt Credit and Collections Act.

You may want to talk to a debt/collections attorney to find out your
options.  If they continue to call after you have told them to stop,
they owe you a large fine as a settlement.

You can continue to ignore this item if you wish, if you are willing
to accept the fact that it might go on your credit report.  Since it
is so old, the city tax collector may not want to dig up old
records/files to provide you with a copy of the original debt, even
though you have the right to request that.  City tax collector
probably turned it over to the collector to collect from you, but you
also need to find out if a statute of limitations has expired for them
to collect this debt from you.  If the city tax collector does not get
back with you with proper documentation, I would ignore the request
for payment.

NOT a GOOGLE RESEARCHER