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Small Towns Blast Malloy's Car-Tax Plan

By CHRISTOPHER KEATING

March 04, 2013

HARTFORD — Small-town leaders blasted Gov. Dannel P. Malloy's proposal to eliminate the car tax, saying Monday it would lead directly to higher property taxes. .

Twenty-two leaders in the Council of Small Towns submitted testimony to the tax-writing finance committee to oppose Malloy's plan because the towns would not be reimbursed for the lost tax money.

"It's an unfair mandate, and it is going to cripple people,'' said Barbara Gilbert, the town manager of Rocky Hill. "When you look at the small towns, it's a drastic impact.''

New Canaan First Selectman Robert Mallozzi said he did not know any town officials who were pushing for the idea, adding that Malloy favors it without any apparent groundswell of support.

"This is so top-driven it's unbelievable,'' said Mallozzi, who drove from New Canaan to the Capitol on Monday morning. "It's not one bit an ask by the municipalities.''

City mayors have complained, too. Based on the latest numbers, Hartford would lose $21 million in taxes under the proposal, and Bridgeport would lose $17.4 million. New Haven, where Mayor John DeStefano opposes Malloy's idea, would lose $14.5 million, based on the latest figures from the legislature's nonpartisan fiscal office.

But Malloy said Monday that he is sticking by his proposal because he believes the car tax is flawed.

"They've got a tough job to do. I did that job for 14 years as a mayor,'' Malloy said. "It is one of the most egregious taxes on the books in the state of Connecticut. ... It makes no sense. A car is a car is a car. It has exactly the same value, no matter what community it is in. It's the most hated tax. It's the most unfair tax. It's the most middle class-unfriendly tax we have. It's time to do something about it. At least we're having a discussion, and I'm hopeful we're going to do something about it.''

The exact impact on taxpayers would depend on their own circumstances.

But town leaders said that renters with high-priced cars would be the biggest winners because they would see their car taxes sliced sharply at a time when they do not have a property tax burden because they rent. The tax rates on cars vary widely – with high rates in cities like Hartford and low rates in rich towns like Greenwich. As such, the same car would have far higher taxes in Hartford and Waterbury than in Greenwich or New Canaan.

A family with two older cars, for example, might be paying a relatively small amount in car taxes. But they might also be paying a substantial amount in real estate taxes and might have to absorb more of the overall burden as the property taxes shift from cars to homes, officials said.

"This proposal will cause owners of modest homes and modest cars to pay more of the local tax burden than they do currently,'' said Weston first selectman Gayle Weinstein. Noting that her small town would lose $2.37 million in automobile taxes, she said the subsequent tax hike on the average home would be 3.8 percent or $635.

John Elsesser, the town manager of Coventry, said Malloy's proposal was not well thought out on an important issue.

"It's time for comprehensive reform, not a piecemeal approach,'' he said.

Malloy's plan would lead to an 8.5 percent tax increase on homes in Coventry, he said. An average home with a market value of $200,000 currently pays $3,769 in property taxes and $113 in car taxes, he said. The homeowner's tax would jump to $4,089, but even with the elimination of the car tax, the net tax increase on the homeowner would be $207, he said.

Norwalk Mayor Richard Moccia said his city would lose $15 million a year from the car tax, and it would lead to a 10 percent property tax increase for many homeowners. He added that some senior citizens who are paying high property taxes are not driving fancy cars.

"I assure you, they are not driving $40,000 cars,'' Moccia told legislators. "The public is opposed to it, and I have met almost no mayors or first selectmen who said this would work. Please, do not pass the burden to the cities because we are not a special interest group. We are the state of Connecticut.''

Moccia quoted from a newspaper story during the 2010 gubernatorial election campaign when Malloy said, "What I'm going to do is stop shifting the burden to local government.''

Anthony Candelora, the mayor of North Branford, said the average homeowner would see an increase of $480 a year because of the elimination of the car tax.

"In North Branford, we've had businesses moving out — closing shop. One pizza place was there on Friday and closed on Saturday. Gone," Candelora said. "You can only tax people so much. ... They're basically taking it out of one pocket and putting it into another."