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CT Municipalities Win; Car Tax Proposal Is Dead

by | Jun 5, 2013 6:49pm
() Comments | Commenting has expired
Posted to: Local Politics, State Budget, Taxes

Christine Stuart file photo

House Speaker Brendan Sharkey announcing the M.O.R.E. Commission

Creation of a statewide motor vehicle tax that would eventually be phased out was a key piece of House Speaker Brendan Sharkey’s approach to regionalism, but it won’t be implemented as part of the state budget.

Sharkey, a legislator who prides himself on his attempt to get cities and towns to work more efficiently, was successful in getting the bulk of his proposals included in the budget. But at the last-minute the motor vehicle tax changes were removed.

“I’m not sure why we would not be looking to eliminate the most regressive and unpopular tax in the state of Connecticut,” Sharkey said Wednesday.

Sen. President Donald Williams delivered the news to Sharkey Tuesday evening after finding there was no support for it in his caucus.

The idea for the phase out of the current system where cities and towns charge different mill rates was conceived by Sharkey’s Municipal Opportunities and Regional Efficiencies Commission. But there was no support for it among Democratic Senators.

Williams said he had not discussed the issue with his caucus before the implementer bill was drafted Tuesday night.

“There was strong opposition to rolling that [car tax] phase-out out at this time,” he said. “All of the other proposals that made up the speaker’s M.O.R.E. bill were acceptable to our caucus.”

Sharkey said he was “disappointed” about the elimination to the car tax changes.

Sen. Gary LeBeau, D-East Hartford, said it’s not that they didn’t want to get rid of the tax.

“It’s that it’s more than a half billion [dollars] and there’s no substantive proposal to help municipalities make up the lost revenue,” he said. “It was too much all by itself.”

The state’s largest municipal lobby worked hard to get the changes to the car tax removed from the budget, but said it’s willing to continue working on a solution.

“We look forward to working with the speaker and the M.O.R.E. commission to look at reforms to the property tax system in Connecticut,” Jim Finley, CEO of the Connecticut Conference of Municipalities, said Wednesday. “He has our cooperation and support to finding a solution to the inequity of the motor vehicle tax.”

Finley said municipal officials opposed the changes to the car tax phase-out because cities and towns would lose nearly $700 million in revenue.

Under Sharkey’s proposal in October 2014 a statewide cap on the mill rate would go into effect. The cap would start at 80 mills. The only city with a mill rate that would be near cap is Hartford.

The equalized mill rate in Connecticut at the moment is about 28.9 mills.

However, Sharkey explained that Hartford wouldn’t begin to lose revenue until the second year of the proposal. In the second year the cap would drop by 8 mills and the following year by 12 mills until eventually it’s eliminated by 2020.

The proposal was different than what Gov. Dannel P. Malloy had proposed when he released his budget in February. Malloy tried to eliminate the car tax and all the revenue municipalities receive as a result.

The move caused Democratic mayors who receive support from Malloy to cry foul. Mayors and first selectman came to the state Capitol to pan the proposal on several occasions earlier this year.

Malloy has pushed back, calling the car tax one of the most regressive taxes collected in the state.

“It is one of the most egregious taxes on the books in the state of Connecticut,” Malloy said earlier this month. “You own a car in Greenwich you’re charged less than 11 mills. You own a car in Hartford you’re charged 75 mills. It makes no sense.”

The elimination of the tax was part of Malloy’s “middle-class tax relief” package.

Hugh McQuaid contributed to this report.

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Comments

(8) Archived Comments

posted by: Noteworthy | June 5, 2013  9:48pm

Pitiful and the explanation of why it failed is just as bad. Gosh it’s amazing how fast the taxes are loaded on and how they never end. Even the temporary ones. And just a note for Sen. LeBeau, it is not a half a billion dollars all at once. It was phased in and could have been and should have been handled. All these cities and towns want the state aide, and don’t want to do anything to regionalize or help themselves. The biggest ripoff of taxpayers is using our property tax money to fund the CCM lobby which does nothing but demand more and more. What’s it going to take to have legislators who listen to the people more than they listen to the lobbyist?

posted by: DrHunterSThompson | June 6, 2013  12:04am

The people lose again.

Noteworthy is right, the munis are feeding at the trough and CCM is the guardian. Until we regionalize services we will be screwed over and over thanks to the enormous appetite of the CCM and it’s members.

HST

posted by: Commuter | June 6, 2013  7:07am

Poor outcome. The phase out was very workable. This is long overdue and needs to get done.

Maybe a special session on the motor vehicle tax after the election in November? Right. Never mind.

posted by: justsayin | June 6, 2013  12:09pm

I can find no logical reason to remove or change this tax. If you are going to do this with cars why not all property? Is it really about taxes or votes?

posted by: dano860 | June 6, 2013  11:23pm

We have to ask ourselves what is really happening here? Why do the politicians that claim they can’t find any cuts to apply to the State budget want to grace Towns with a reduction in taxes? They expected the Towns to make ends meet and establish a budget without even knowing what they were to be receiving from the State.
This should be a warning shot across the bow of the Towns…the State is looking to take over the collection of these revenues, somehow? They are already reducing the give backs to hospitals. They can do that without to much grief because it doesn’t involve any education or municipal services.
There will still be some sort of revenue enhancement in order to get the same or more results. If the State takes up the collection and re-distribution you can be certain that the unions will be the recipients of the larger share. The group that calls themselves, “A Better Connecticut” or “ABC” are a front for the Teachers Union. All they care about is “A Bigger Check”.
The 50th District Rep. put forward a proposal to reduce the budget and solve a pension problem too. Guess how that went! Check out his proposal in the following link.
http://www.youtube.com/watch?v=2DrnxvIVZFM&feature=youtu.be

posted by: Fisherman | June 7, 2013  7:04am

justsayin… The only purpose of this bill is to appease the potential voters living in the larger municipalities (read “cities”); as these are the Democratic Party’s bread-and-butter.

posted by: DirtyJobsGUy | June 7, 2013  9:41am

Sometimes it is useful to remind New Englanders that there is a world past the Hudson.  In almost all other states there are no taxes on cars as real property.  They are too mobile and high taxes are seen as a burden (see all the Florida plates here in CT).  Since town budgets are all about teacher pay, the state plays a huge role.  How about we drop mandates and let the towns decide if they want to tax the cars?  If Norwich were to go no tax, it might help their local economy for example.

posted by: Fisherman | June 8, 2013  7:56pm

dano860…“A Better Connecticut” or “ABC” is definitely NOT a front for the Teachers Union (but the Teacher’ union DOES want “A Bigger Check”.