Hartford's Property Tax Reform Task Force recently completed its work with some proposals that deserve serious consideration by the General Assembly, and two that should be rejected outright as detrimental to the city.
The first of these involves a bill passed in 2006 to ease the effect of revaluation on residential taxpayers. That bill limited the tax increase from the revaluation on homes and apartments to 3½ percent a year for five years.
The task force proposes to remove this protection from homes and apartments that are not owner-occupied. This will cause tax increases of approximately 88 percent on apartment buildings with more than four units and 116 percent on residential structures with four or fewer units. These increases assume no increase in the budget, which is highly unlikely. The real increases could be much higher.
Revaluation is a zero sum process. If someone pays more, someone else pays less. The plan here is that 85 percent of the additional $23 million raised by this change would benefit business properties, reducing their tax burdens modestly.
The problem is that these tax increases will almost assuredly be passed on to the tenants of these properties. If tenants cannot or will not pay these increases, then I fear an increase in deferred maintenance, tax delinquencies and housing abandonment. We already have too many neighborhoods that are struggling under our current tax structure. Significant tax increases will bode ill for these fragile neighborhoods and for the small businesses that serve them.
Proponents of this proposal have stated that tax increases will not necessarily be translated to rent increases and will spur homeownership by Hartford residents. I believe both are naive assumptions, and as a Hartford homeowner of 40 years (my property would still be protected), I am unwilling to assume those risks. The business community, both large and small, should also be concerned about the viability of Hartford's neighborhoods, where many of its employees live.
Also, we will be asking renters, those least able to pay, to subsidize a tax decrease for those most able to pay. That is not fair.
A second recommendation of the task force that should be rejected is one calling for annual "statistical" revaluation, meaning a revaluation without a full inspection process. Proponents say this will eliminate the "shock value" of tax shifts occurring over a five-year period, the current revaluation period. But the "shock value" is important.
Without it, we wouldn't have gotten the last bill passed. The insidious shifts in the tax burdens that have been occurring for the past 30 years will not be easily recognized and, therefore, will not be dealt with by legislative action. These shifts are particularly acute in cities such as Hartford, where the residential tax base is small compared to the commercial base.
There are potentially beneficial recommendations from the task force, such as full state funding of the payment in lieu of taxes program, which compensates towns for tax-exempt properties.
But shifting more tax to renters and holding an annual revaluation are not in the city's best interest.
Timothy J. Sullivan is a Hartford resident who has been active in tax issues for three decades.
Reprinted with permission of the Hartford Courant.
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