Blumenthal Cites Loss of Deduction for Crumbling Foundations: ‘This Hits Connecticut Harder’
HARTFORD — U.S. Sen. Richard Blumenthal on Monday said Connecticut has more to lose than some other states if the Republican-backed federal tax plan is signed into law, because a tax write-off is about to be eliminated for thousands of Connecticut homeowners with crumbling foundations.
“This hits Connecticut harder,” Blumenthal said Monday at a press conference at the Legislative Office Building, where he discussed how the Senate and House Republican proposals to overhaul federal tax policy would eliminate the tax deduction for property casualty losses except those stemming from federally declared disasters.
Blumenthal and fellow U.S. Sen. Chris Murphy have raised concerns about eliminating the deduction, which was approved by the Trump administration a few weeks ago. But as Democrats who oppose the overall tax reform bill, they failed last Thursday in their attempt to amend it.
But he said since many of those who own homes with crumbling foundations have yet to begin repairing the damage, those who would be eligible to be reimbursed could be a “minute portion.”
“The repeal of the casualty loss deduction would cruelly reverse the relief granted for homeowners who have suffered severe and costly property damage due to extenuating circumstances beyond their control — from fires, to vandalism, to crumbling foundations,” said Blumenthal.
Murphy added: “People living with crumbling foundations have been through so much already. They don’t deserve to be jerked around like this. This is another reason we’re fighting tooth and nail against this disaster of a bill.”
Anywhere from hundreds to perhaps tens of thousands of homes have been impacted.
As of December 2016, some 567 homeowners had reported their crumbling foundation to the Department of Consumer Protection. The Office of Fiscal Analysis says that over the next 15 years affected municipalities could lose about $40 million to $80 million in tax revenue because of the problem. OFA estimates that 20,000 homes could be impacted, while other groups say it’s closer to 30,000 homes.
Insurance carriers have refused to cover the damages for homeowners who experience the problems, which are thought by some to be tied to high levels of a mineral called pyrrhotite within the concrete. Pyrrhotite is an iron sulfide that oxidizes, or rusts, when it comes in contact with water. The reaction causes foundations to buckle.
And the cost of replacing a foundation — involving the lifting of a house, the demolition of the old foundation, and the pouring of a new one — can run $150,000 to $200,000 or more.