HARTFORD — As lawmakers prepared for a deficit-marred session, Mayor John DeStefano made a surprise pitch.
He called for getting rid of municipal tax on automobiles in Connecticut — as part of a bargain to create a statewide property tax.
Melissa Bailey Photo
The proposal came on the eve of the new three-month state legislative session, which opens Wednesday amid a $6 billion two-year deficit forecast.
And it represented a 180-degree reversal from the mayor’s position four years ago, when he was running against Gov. M. Jodi Rell for the governor’s seat. At that time, Rell proposed eliminating the car tax; DeStefano called her “oblivious” for making that suggestion.
This time, DeStefano isn’t running for governor. He still shows up in Hartford as one of the most outspoken municipal leaders lobbying on statewide issues. Now DeStefano says he’d be willing to cut the car tax — but only as way to broker a deal on statewide property tax reform.
He floated the idea at a subcommittee meeting last Wednesday of a new blue ribbon commission called Municipal Opportunities and Regional Efficiencies (MORE). It was the first meeting of the Revenue Streams and Economic Development subcommittee, a group of local and statewide leaders tasked with coming up with new ideas to save money and bring revenue to towns.
DeStefano set the stage by telling the room how New Haven provides jobs, infrastructure and social services for the region — but is forced to rely on the municipal property tax as the sole tool to raise revenue. That’s a problem, he said, because of the great portion of the town that’s tax-exempt.
New Milford Mayor Pat Murphy asked a question: Have you considered a local income tax?
DeStefano replied that he pushed for a local income tax as part of a package of “local option taxes” last year. None passed through the legislature.
The income tax has problems, he said, but “I happen to think the property tax works quite well.”
He threw out a suggestion: “How about a statewide property tax?” The tax would be on homes and land.
Murphy frowned on that idea. She said her taxpayers already pay too much.
DeStefano made a gesture to sweeten the deal: What if we get rid of the car tax?
Automobile accounts make up a large part of towns’ tax accounts, and are the most “painful” to collect, he said. “Frankly, what I would do is eliminate the car tax.”
State Rep. Russ Morin of Wethersfield, one of two co-chairs leading the discussion, encouraged the panel to “get back on track.” The panel has five weeks to come up with short-term goals for this legislative session, he said.
“I’m just trying to enrich the discussion here,” DeStefano later explained. “It was an attempt to suggest what was a bigger idea.”
Morin declined to take a stance on DeStefano’s idea, except to say that everything’s on the table.
After the panel adjourned, the major explained his car tax switcheroo.
“It is a total reversal,” he acknowledged.
During his campaign, he slammed Rell for proposing to eliminate the car tax. He said it would benefit someone in Greenwich with “21 cars” far more than a working-class family.
Rell was going to compensate towns for the lost car tax by creating a new state grant. He accused her of failing to take a serious look at a property tax structure.
The mayor said he opposed Rell’s proposal in part because he wasn’t convinced that money would come through. “If you think about it, had we received a state grant for autos, that would be on the table going in to next year.”
The difference between his and Rell’s proposals: DeStefano said he’d stream some of the state property tax proceeds directly to cities. He sees his proposal as part of a larger bargain.
“If you do do something like a statewide property tax, you do have to offer everybody something,” DeStefano said, “and frankly the car tax is a way to offer everybody something.”
The car tax is a burden to towns and cities, he added.
“It’s the most difficult tax to collect,” DeStefano said. It’s the “vast majority of accounts in our system,” he noted: Car tax accounts make up over two-thirds of the city’s 100,000 tax accounts.
It’s a lot of bureaucracy – cars often change ownership and are tough to track down. “The house, the land – it’s there.”
DeStefano said his proposal would be best pursued in 2011 – when a new leader sits in the governor’s seat. But he said he would still try to push for a statewide property tax this session.
State Sen. Len Fasano, a Republican from North Haven, blasted DeStefano’s idea of the statewide property tax.
“It’s feeding the monster,” Fasano said. “The problem is that government is way too big.”
He said he understands DeStefano’s interest in the statewide tax: “the more money that gets to Hartford, the more he gets back.”
By contrast, Fasano said for every dollar North Haven sends to Hartford, it gets only 8 cents back. The more money suburban taxpayers pay to the state, the more it’s reallocated to big cities, he said.
“Shifting tax burdens is not the solution to overspending. Cutting is the solution to overspending,” Fasano said.
Fasano said he “absolutely” would have rebutted DeSetfano’s pitch Wednesday — if he had been invited to the meeting. The blue ribbon commission, set up by Democratic Speaker of the House Chris Donovan, contains 45 Democratic representatives, but no Republicans or senators.
“The truth of the matter is it’s like-minded people in the room exchanging like-minded ideas,” he said. When those ideas are passed on to the legislature, they’ll likely get crushed, he predicted.
I guess it's a republican's job to be out of touch with reality. I'd love to see some hard evidence that the state/town governments are too big.
Did anyone show Fasano the long-term economic study that showed people fare better under a democrat financially? Let's let republicans worry about freedom of speech & the right to bear arms & separation of church & state. We can handle the money.