It was a chorus of protest Monday at the state Capitol, as dozens of mayors, selectmen and municipal advocacy groups argued that Gov. Dannel Malloy’s proposed budget and car tax exemption would be disastrous to Connecticut towns.
And Farmington officials didn’t miss the chance to add the town’s concerns to the record. Town Manager Kathy Eagen and Town Council Chairman Jeff Hogan submitted testimony Monday, mainly criticizing the elimination of grants the town has received and counted on for operating costs for years. In particular, the testimony names the Payment In Lieu of Taxes grant, which reimburses towns for tax-exempt state-owned property.
“Among other things, the elimination of the PILOT for state-owned property, the elimination of the Pequot grant for two years and the elimination of local revenue from motor vehicle tax… will only increase the local property tax rate and/or reduce service levels at the local level,” the testimony reads.
But by how much?
“The potential loss of grants such as PILOT and tax revenue from motor vehicles totals nearly $8,000,000 for Farmington. If Farmington faced this level of revenue shortfall the ramifications would be dramatic and detrimental to the entire town. The increase to the tax rate would be unacceptable to the Town and its taxpayers.”
Farmington Finance Director Joseph Swetcky ran the numbers on what would happen to the average homeowner’s tax bill, should the car tax exemption pass. Though the real estate revaluation that goes into effect this year complicates the figures, Swetcky said the loss of car tax revenue would mean a substantial increase in property taxes.
“Under the Governor’s proposal approximately 75 percent of our motor vehicle grand list would be exempt from taxes. This equals $165.4 million of assessed cars on the 2012 grand list,” Swetcky said.
At the current tax rate, that would be a loss of $3.6 million in revenue to the town, which would require a tax rate increase of 1.18 mills or 5.4 percent.
Instead of having a tax reduction of $190.34, as revaluation calls for, the average home would have a tax increase of $273.70, Swetcky said, meaning the total increased tax burden on the average Farmington homeowner would be $464.04.
Read some of the testimony on SB 843 here.