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Farmington Officials Fear Town Will Lose Millions With Car Tax Change

Gov. Malloy proposes exempting 90 percent of vehicles from property tax but local officials say that will mean making up the difference in real estate taxes.

In presenting his two-year budget proposal, Gov. Dannel Malloy said that, “we have no desire to shift the burden to our towns and cities. This budget holds them harmless.”

Indeed, even though Malloy stripped Farmington of several traditional grants, including reimbursement for state-owned property like UConn and Tunxis, he made up the difference with a new grant, calling it the “Hold Harmless Grant.”

But Farmington officials and state legislators said Tuesday at a Farmington Town Council meeting that the town will not only suffer harm but disaster should Malloy’s plan to do away with one of its largest sources of revenue – the car tax – take effect.

In his address, Malloy proposed exempting more than 90 percent of vehicles from the tax, which the Connecticut Conference of Municipalities estimates raises more than $560 million for Connecticut communities. In Farmington, it would mean a loss of about $5 million, officials estimated Tuesday.

“Owners of vehicles with market values under $28,500 would pay no property taxes at all on those vehicles,” Malloy explained, calling the plan tax relief for middle class and poor families.

Towns would have the option of phasing in the exemption in 2013 but would have to forfeit it in July 2014.

Local officials see a number of problems resulting from the loss. 

“To make up revenue you need to cut certain services or raise taxes on real estate,” summarized state Rep. Brian Becker, who represents Farmington, Avon and West Hartford.

Farmington Town Council Chairman Jeff Hogan said he was “shocked and appalled” when he read the governor’s budget and that cutting the car tax amounted to an attack on those cities and towns that had worked hard to be financially responsible and maintain low mill rates.

“I feel … that the loss of PILOT and the loss of the car tax to Farmington specifically would be devastating. On the car tax — why? We run a great town here. We’ve done it right. … Farmington has been governed well for many, many years and we’re being punished,” he said. “It’s ludicrous that we should raise taxes on our residents to finance the ills of the state.”

Farmington Town Councilor John Vibert had another concern: leaving the majority of residents with no tax responsibility to keep them invested in local government. 

“As far as I can tell this will just shift the tax burden from car owners to property owners. In most cases that will remove all property tax burden from renters in town and disconnect people from town government,” Vibert said.

Though the inevitable increase in real estate taxes might be passed along to renters in the form of higher rent, Vibert worried that renters wouldn’t associate that with supporting town government.

“Nobody likes the taxes but it provides them a feeling that …’my kids go to school here. I pay taxes and support this,’” he said.

Malloy’s rationale for removing the tax was that it’s “unfair” because “residents in different communities pay very different amounts on the same property value.”

Sen. Beth Bye (D-West Hartford) said Malloy is just trying to keep “the balls in the air while waiting and hoping for the economy to come back.”

But she didn't back the plan.

"When you sit down and talk to residents, its one of the most unpopular taxes. So [eliminating the car tax] is a popular thing to do and that’s why governors propose it... you can say it’s unfair but mostly the governor is looking for a way to provide relief... I do think it takes one of the very few ways communities have to raise revenue away from them, so unless you replace that with something else, you've given them a difficult task," Bye said.

She advised that Malloy’s budget will be subject to a public comment period when residents and officials may voice concerns. Public hearings and bills are listed on the www.cga.ct.gov. Budget information will be listed under Appropriations.

Anne February 15, 2013 at 03:39 PM
Part of me agrees with the concerns mentioned in the above article but then I wonder...how do states like Vermont and New Hampshire do it. They have NO car tax and yet they survive. Perhaps they don't over spend. Seems they still have plenty of services...just less government!! Not sure of the answer...just thinking!
Paul Chotkowski February 15, 2013 at 06:57 PM
Councilor Vibert if your logic had any validity, we would expect the 47% “Covetous Takes” to pay some income taxes but in the name of misguided social justice we don’t and they have no stake in society other than "give me free stuff or I will get mad and burn my neighborhood down". Why would it surprise anyone that Governor Mao Loy advocates “redistributing” the cost of government to greedy property owners who simply will not pay their fair share of the costs to run local government. After all if you own property you didn’t “build that”, you must have stole it from someone, bought it with profits, profits you most likely made gouging the poor for necessities, or used your purchased political influence to despoil the environment with your environmentally appalling suburban sprawl [where are Agenda 21’s development restrictions when you needed them]. So Mr. Vibert save your breath, you and most of the residents of Farmington are 1%’ers, you don’t pay your fair share, and Governor Mao Loy and his merry band of Redistributionist are going to make you pay! Until the kool aid drinking zombie voters of the state start electing liberty minded, small government, freedom loving politicians it is only going to get worst nationally, in Hartford, and based on the freewheeling spending at the BOE [can't wait to see what Ms Grace comes up with at contract time - can anyone say "make up raises"] here in Farmington.
Bill Stanford February 16, 2013 at 11:53 AM
"Sen. Beth Bye (D-West Hartford) said Malloy is just trying to keep “the balls in the air while waiting and hoping for the economy to come back.”" Given her quote, how can our Democrat State Senator follow this man as he leads our state into the fiscal abyss. "Hope" doesn't cut it . Connecticut needs to get its fiscal situation in order before outsiders force it to happen.

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