New Canaan’s highest-elected official joined fellow Connecticut small town leaders in Hartford Monday in criticizing a proposed car-tax proposal that they say would raise taxes in other areas.
The proposal—called “An Act Concerning Revenue Items to Implement the Governor’s Budget”—would eliminate property tax on motor vehicles with an assessed value of less than $20,000, New Canaan First Selectman said in testimony submitted at the state’s capital.
“New Canaan stands to lose about $2 million in tax revenue under this proposal,” Mallozzi said, according to a statement provided to Patch.
“The proposed elimination of the car tax would be very problematic for New Canaan and other small towns,” he continued. “We would have to make up for the revenue loss by increasing property taxes on homes and businesses which would hurt middle-class and elderly residents.”
According to the Hartford Courant, 22 leaders in the Council of Small Towns submitted testimony to the tax-writing finance committee.
“The so-called reduction in costs to our town by not having to collect and administer the property tax on motor vehicles is ridiculous,” Mallozzi’s statement said. “The same employees we employ to administer our real estate taxes will still be fully involved in the process and we estimate any work-load savings at roughly $30,000—hardly significant cost reductions based on a $2 million reduction to revenues.”
The Connecticut Council of Small Towns—or "COST," which represents Connecticut towns with populations of less than 30,000—cites the Office of Fiscal Analysis in saying the elimination of the car tax will result in a revenue loss to towns ranging from $550 million to $600 million, a 15.5 percent drop.
Here's a snippet from a COST press release:
Some lawmakers are also considering a proposal to create a statewide mill rate for motor vehicles. [COST] opposes the creation of a statewide mill rate which would require towns to send local tax dollars to the state and gamble that a fair portion of those dollars would come back to the towns.
“Unfortunately, separate, non-lapsing accounts have a tendency to lapse, particularly when the state is looking to address budget deficits. Towns need to retain control over how local property taxes are spent,” said Betsy Gara, Executive Director for COST.
COST does support provisions in the Governor’s proposed budget which double funding for the Town Aid Road program and restore funding for the Local Bridge program - programs that COST has long championed.
Read the full text of the proposed bill here.