Thomas MacMillan Photo
An elderly couple was about to get its wishes granted — a deferral on their property taxes. Then Darnell Goldson spoke up. Why should they pay anything at all? he asked.
That put the couple’s request in a new category. And it raised a new debate in town about whether it makes sense not just to defer some people’s taxes — delaying payment — but to forgive them, erasing the debt altogether.
Goldson (at right in photo), a West Rock alderman, raised his question at Monday night’s meeting of the Board of Aldermen.
The aldermen were considering some individual pleas by taxpayers who wanted help.
The Johnsons had requested a deferment of the taxes on their Westville home, which would have allowed them to delay payment indefinitely and lock in a low interest rate on the eventual repayment. Their request had cleared the Board of Aldermen’s Tax Abatement Committee and was up for a vote by the full board on Monday. After Goldson’s objections, the board voted to recommit the request to committee, where the Johnsons will now have an option to ask for full forgiveness of their outstanding property taxes, totaling $3,433.95.
Goldson said he’d like to see the guidelines for tax abatement applicants rewritten to allow more people to ask for tax forgiveness instead of deferral. It’s part of an effort to trim the budget, he said. Goldson had originally proposed cuts to the city’s recently adopted $471.6 million budget. But those cuts were never adopt. So now, Goldson said, he’s trying to curtail city revenue and therefore city spending through other means. If more people win tax forgiveness, that will mean less tax money coming to the city.
In a related move on Monday night, Goldson promised to push for a freeze of all taxes for the 398 elderly New Haveners whose taxes were recently raised after being lowered in error. Goldson said he’ll submit a proposal to the board that would freeze the taxes at the erroneously low level.
His promise came in response to the passage of an order waiving tax penalties and interest for the 398 seniors who had their taxes raised unexpectedly this year. The board voted unanimously to pass that measure Monday night.
Monday night’s tax discussions came in the midst of ongoing taxpayer outrage directed at the tax assessor’s office and the Board of Assessment Appeals. Bill O’Brien, the assessor, has twice appeared before the Tax Abatement Committee to get an earful of complaints from taxpayers who say they’ve seen arbitrary increases in their business property taxes. Normally tax-exempt non-profit organizations have complained that they’re receiving tax bills for the first time this year. Car owners say their seeing increases in the city-assessed value of their used cars.
On Monday night, when the order deferring the Johnsons’ taxes came up, Goldson asked if the aldermanic Tax Abatement Committee has the power to forgive the taxes. Informed that it does, he made the motion amending the order from deferral to forgiveness.
“Lots of folks come to the committee for help and they don’t know to ask for forgiveness, they just ask for deferral,” Goldson said.
Hill Alderman Jorge Perez said that the guidelines for applicants to the Tax Abatement Committee state that people may ask only for tax deferral, not forgiveness. (The committee has the legal power to grant either.)
Bad Precedent?
“My concern is we tell other people they can’t ask for this,” Perez said. “It’s not fair to other people who have followed the rules.” He said he would be voting against Goldson’s amendment, “regretfully.”
West River Alderman Yusuf Shah spoke up in favor of deferral over forgiveness. “The city is strapped for dollars,” he said. “It would set a bad precedent to do this by amendment.” Shah said the spirit of the amendment was admirable.
“We have two forgiveness items on this agenda,” Goldson said. “We do it. … Why are we not forgiving this?”
Goldson said deferred taxes will make it harder for children to inherit the homes of their parents, because they won’t be able to afford to pay all the taxes that will come due at the time of the deed transfer. That will lead to more and more people being priced out of homes in New Haven. “Neighborhoods start to disappear,” Goldson said.
Fair Haven Heights Alderman Alex Rhodeen sought to make a distinction between the forgiveness Goldson was seeking and the two tax forgiveness items on the agenda. The first, Rhodeen said, was a forgiveness of taxes billed to New Haven Land Trust, a non-profit organization that had simply forgotten to file its tax-exempt paper work. The second, a forgiveness of motor vehicle taxes due from Sharee Parker, was due to Parker providing proof that she didn’t own the car in question, Rhodeen said.
“This isn’t arbitrary,” he said. “Let’s not inject an arbitrary decision into an otherwise orderly process.”
East Shore Alderman Al Paolillo, following a question by Hill Alderwoman Andrea Jackson-Brooks, made a motion to re-commit the Johnson’s request to the Tax Abatement Committee.
Fair Haven Alderman Joey Rodriguez suggested that the Tax Abatement Committee consider the question of deferral versus forgiveness for all future applicants, not just the Johnsons.
Smart said any fees or penalties that the Johnson’s may incur because of the re-committment could be waived.
The motion to recommit the item passed unanimously.
After the meeting Goldson said it wasn’t until the meeting that he learned that the Tax Abatement Committee has the power to grant forgiveness, not just deferral. He said he’s been asking about it for two months without getting a satisfactory answer, so he decided, “I’m just going to force the issue.”
The Office of Legislative Services later clarified the question of aldermanic powers of forgiveness. The Tax Abatement Committee has broad jurisdiction under the law. Decades ago, guidelines for applicants were created to narrow the scope of committee action. Those guidelines are not enshrined in law and can be revised at any time. Read the rules here.
Goldson acknowledged that a change to the guidelines could mean more tax forgiveness and fewer tax dollars to the city. “So the city loses money,” he said. “We’re not here to make money.”
Goldson said he campaigned for his aldermanic seat on a platform of easing the tax burden. He wasn’t able to achieve that during the recent budget negotiations. “If I can’t do it at the budget meeting, I’m going to do it with these 1,000 cuts.”
With less revenue, the mayor will have to find ways to make spending cuts, Goldson said. The aldermen will not get to decide where those cuts happen, he said. But the administration will have to make the right decisions or hear about it from voters. “They’ll have to deal with it on election day,” he said. “Maybe they’ll think twice before hiring a new associate media position.”
Reached at their house on Tuesday, the Johnson’s declined to speak on the record about the aldermanic discussion.
Goldson: Freeze The Error
In another tax-related development, aldermen voted Monday night to waive penalties and fees for the 398 seniors who have seen their taxes rise unexpectedly this year. The elderly New Haveners are participants in a tax program that erroneously lowered taxes last year for about half of its participants. Those 398 taxpayers are now seeing their taxes raised to the correct level this year. The vote by the aldermen gives senior extra time to pay the taxes without worrying about incurring late fees or penalties.
Alderman Goldson said the measure doesn’t go far enough. He said he will be submitting to the board a proposal that would freeze taxes at the erroneously low level for the 398 seniors. “I want to make it simple he said.”
Goldson said he knows of other seniors who saw unexpected tax raises that have not been counted among the 398. He said he contacted city staff to look into a tax increase for Mary Barrett, an elderly resident in his ward. The letter he got back from city Comptroller Mark Pietrosimone was completely incomprehensible. Goldson said aldermanic staff “got dizzy reading it.”
Pietrosimone wrote that Barrett’s situation was complicated by her participation in state and municipal tax programs and by miscalculations in the assessor’s office. A sample sentence: “The local freeze program will only become active in the event her state freeze benefit is reduced to the point that her taxes are now greater than the tax amount that she froze to.”
Pietrosimone wrote that he would make sure Barrett is included in the group of 398 who will not have to pay penalties or fees.
This is a great idea in theory, but unfortunately would just shift the tax burden to others. The question is, who pays?
Obviously it's difficult for seniors and others on a fixed-income to pay property taxes, particularly when property taxes keep going up the way they have in recent years. The problem is, by excluding one group of people from taxation, you're just making it everyone else's problem. This means working families would pay more, young people just starting out would pay more, and everyone else in between pays more.
Cutting off revenue is not going to bring down the budget as Goldson suggests, though I would be happy if it did. If we want to reduce the size of the budget, we should do just that. This "back door" approach Goldson is taking would likely just leave us with a higher mill rate as the pool of people paying taxes shrinks. Let's focus on getting budget down to a size we can all live with so that the property tax isn't so onerous in the first place.
Long-term, the property tax needs to be abolished and replaced with a more progressive tax structure that doesn't penalize places like New Haven that host a large number of tax-exempt institutions. Many if not most of these institutions, schools, hospitals, etc. serve the entire region and towns should not be punished for welcoming them in.