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05/09/2019 12:01 AMIn the beginning of any legislative session, bills are filed that may not have much of a chance to pass, but some legislators simply want to throw spaghetti at the wall and see what sticks. When this happens, the reaction can be swift and the opposition fierce.
There were a couple of those moments this year, notably when Senate President Pro Tem Martin Looney (D-11) proposed regionalizing school districts in line with our sprawling Probate Court District (yikes), and also when Looney (yes, him again) proposed eliminating the car tax, depriving towns of that revenue, but invoking a statewide car tax. That proposal would have increased property and motor vehicle taxes. You go, senator!
Both bills seem to be dead, but here we are in May and the rubber is starting to hit the road. The most recent tax proposal eliminates the car tax completely but also mandates that municipalities assess all property at 100 percent rather than the current 70 percent. The long and short of this means that if you rent, not own, you will not pay motor vehicle taxes. If you own a home, your real estate taxes will increase about the amount you currently pay on you motor vehicle taxes. The Town of Old Saybrook will still raise the same amount in tax collection. However, the burden will be shifted so that only residential and commercial real property owners are paying taxes.
Should this occur, the effect of will not be overly significant in Old Saybrook. Towns and cities that have a lot of rental units will likely see a significant shift of the tax burden to property owners. Query whether this will encourage more rental units to be built. It could also depress home sales (in what is an already depressed Connecticut market) because real estate taxes will be that much higher.
The bill is targeted at tax relief for people who own cars in cities with high mill rates. While the sponsors may see this as tax reform, it is simply shifting the tax burden. It is a huge change in our tax code and one that increases the regressive real property tax. Another bill now getting late traction would increase the sales tax by one-half percent (the sales tax is universally agreed to be the most regressive tax), which is estimated to raise $315 million, of which $290 million would be distributed to 60 municipalities who struggle financially. In other words, this is a tax increase that most cities and towns would see no part of. And don’t forget, these increases in taxes are in addition to other proposed increases in the sales tax, a one-half percent increase in your income tax to pay for a universal Paid Family Medical Leave program and, of course, maybe tolls on our Connecticut highways.
Oh, and have we forgotten that Connecticut still has to figure out how to solve its $4 billion biennial budget deficit, which none of the above taxes address? Stay tuned!