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Canton 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 towns of several traditional grants, including reimbursement for state-owned property, he made up the difference with a new grant, calling it the “Hold Harmless Grant.”

But area officials are concerned with a proposal to eliminate the motor vehicle tax for most owners over a two-year period. Towns would have the option of phasing in the exemption in 2013 but would have to forfeit it in July 2014.

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 Canton, the move would force the town to increasing the burden to those that own personal and business real estate to make up $2.3 million in lost revenue, Chief Adminstrative Officer Robert Skinner said. 

"It's basically taking liability from car owners to people that own real estate," Skinner said. 

First Selectman Richard Barlow said on one hand he understands that a person living in a city with a high tax rate pays a lot more in motor vehicle taxes than in a town with a lower rate but agreed it would either mean drastic cuts or a huge burden for some taxpayers. 

"Clearly it allow municipalities to readjust that grand list cost to real estate and private property," Barlow said. 

Malloy argued it would help those who need it. 

“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.

But Barlow said it could eventually affect those it's meant to help such as apartment owners whose landlords raise rent to cover their additional tax burden. 

In Farmington, it would mean a loss of about $5 million, officials estimated.

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. 

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.”

In Avon officials say the town could lose as much as $3 million.

Avon Assistant Town Manager Steve Bartha said that the proposal would eliminate car taxes for anyone with vehicles that have an assessed value of less than $20,000, or under $28,500 in market value. Cars with a higher value would still be taxed.

“It’s a proposal he’s making and calling it middle class tax relief," Bartha said.

In the current fiscal year, Bartha said the car tax is "a ballpark $4.5 million revenue stream for the town.” He said Town Assessor Harry DerAsadourian estimated that car tax revenue in Avon could shrink to about $1.5 million if the governor's proposal passes.

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.

concerned February 15, 2013 at 10:47 PM
What did you expect voting in an Obama wannabee, take from one to pay for another. The town also needs to reconsider their incompetent ideas (new track and field; covering the swimming pool, looking for a new town garage) and abolish them all and then they won't need to raise property taxes to offset the vehicle tax. Live within your means Connecticut!
Thomas February 16, 2013 at 01:44 PM
Dear Concerned, you are so correct! Canton residents want all the luxury's they can't afford! My suggestion is similar to yours, stop living above your means, abolish the plans for things you can't afford. Then fix the roads so there is a clear path out of hear, to a town that is run properly. Everything you are asking for are in the next towns over, Farmington, West Hartford, Avon & Simsbury!!! What, you can't afford those towns? Then what makes you think you can afford it in Canton? Get a grip Canton, your in for a long haul with the leadership is this Town, State & Counrty!!!
Mike February 16, 2013 at 03:19 PM
Canton seems to have acquired a "want to be just like the next guy" attitude lately. Get it now and worry about paying for it later. Lets hope when the bills comes due we are equally willing and able to pay increased taxes. Realistically, Canton residents pay privately for many services that other towns provide such as trash removal, leaf pick up, etc., from their taxes.
Betty February 16, 2013 at 04:29 PM
Making the difference up by increasing property tax is extremely inequitable.
Ryan February 17, 2013 at 07:57 AM
You are very right. However I disagree on the town garage. If a town garage was done responsibly, it could end up saving money because then they would have no excuse to wash down the trucks after a snow storm and get the salt off the trucks instead of letting them rot as they like to do now. They claim they can't wash them because of the river but they could make it work. Every town around has longer lifespans on trucks because they actually take care of them
N. Jon I. Twist February 18, 2013 at 02:05 AM
Think about it Motor Vehicle Tax decreases every year as they age. Real Estate values used to increase every year as your property was worth more on the market. How many other states have motor vehicle tax, very few. That is why some register their cars and truck in other states. Those who ar gripping, did ya vote? If not shut up!

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