Sam Gurwitt Photo
State Rep. Robyn Porter with constituents at LWV legislative confab.
Martin Looney pulled up to the Whitney Center in his 2012 Honda Accord — hoping that come next year, his latest ideas for tax reform will become law, and that the tax bill for his vehicle will drop by two thirds.
Looney, who represents New Haven and presides over the Connecticut Senate, was one of the four state legislators who spoke at a breakfast event hosted Saturday morning by the League of Women Voters of Hamden and North Haven.
The annual gathering is intended to allow legislators to share what they are working on with constituents, and to allow constituents to share their ideas with the elected officials who represent them.
Looney was joined by fellow Democrats Robyn Porter, who represents the 94th state House District in Hamden and New Haven; and Mike D’Agostino, who represents Hamden’s 91st House District. From the other side of the aisle, but not of the panel table, was Republican George Logan, state senator for the 17th District, which includes part of Hamden.
Over the course of the hour-long conversation, the legislators discussed two controversial bills that would try to address inequities among Connecticut municipalities — one on tax reform, and the other on school district consolidation. Other topics included election reform, services for seniors and the disabled, and the environment.
Tax Reform
State Sen. Martin Looney: Looking for an Accord-freindly accord.
Near the beginning of the discussion, moderator Elona Vaisnys asked the legislators how they would ensure that Connecticut towns and cities are not harmed in an era of cuts to state funding to municipalities. In response, Looney explained the tax reform bill that he recently introduced to the General Assembly.
“An Act Concerning Property Tax Reform,” which was referred to the Committee on Finance, Revenue, and Bonding for consideration before it can be introduced on the floor of the General Assembly, aims to realign property taxes in the state. The bill includes a few parts:
• It would establish a $50,000 Homestead exemption. In Connecticut, properties are assessed at 70 percent of their market value. With the homestead exemption, properties would be taxed on $50,000 less than the assessed value. That is, if a house has a market value of $200,000, it would be assessed at $140,000. With the homestead exemption, only $90,000 of the $140,000 would be taxable. A million-dollar house, on the other hand, which would be assessed at $700,000, would be taxed on $650,000, a much larger percentage of the overall value than for a cheaper house. The measure would lower the property tax burden on families with lower value properties.
• It would enact a statewide property tax of one mill ($1 per $1,000 assessed value) on top of municipal property taxes. When redistributed to towns, said Looney, the extra revenue to towns with high mill rates like Hamden and New Haven would allow those towns to lower their mill rates.
“People talk about state taxes,” Looney told the crowd, “but in reality, when you break it down, the tax that people find the most burdensome is the municipal property tax, more than any tax that’s enacted at the state level.” By shifting certain taxes to the state, Looney’s proposal could lessen the tax burdens in areas where they are highest.
• It would dispose of the municipal motor vehicle tax, and enact a statewide motor vehicle tax in its place at a set mill rate somewhere between 15 and 19. Currently, cars in Connecticut are taxed by municipalities, each with its own rate. That means a car owner in Hamden, which has a mill rate for motor vehicles of 45 (47.96 for other properties), pays almost four times as much in taxes on his or her car as someone in Greenwich, with a mill rate of 12, would pay for the exact same car.
Greenwich Makes Out
Christina Crowder, State Sen. George Logan, and Judy Naden at the forum.
If the proposed legislation were to pass, Hamden and New Haven residents (New Haven’s mill rate is around 42) would see a sizable reduction in their car tax, while Greenwich residents would pay a little bit more.
Right now, New Haveners like Looney pay 4.2 percent of the assessed value of their cars in taxes each year. He said his bill would cut that bill by two-thirds.
It’s unfair to have different mill rates on cars, Looney told the Independent, because the value of a car does not change depending on its location, as property values do: “A car is the same car wherever it’s located.”
According to Looney, the statewide car tax would not raise quite as much in total as the total of all of the car taxes of municipalities at present. In order to match the total of all municipal taxes, the mill rate would have to be set at a level that would be too high for towns with low mill rates to agree to.
Where The $ Would Flow
Carol Mahmood writes a question.
The revenue from both the one mill statewide property tax and the state car tax would fund three programs: PILOT reimbursements to municipalities, special education grants to municipalities, and the Educational Cost Sharing to municipalities, or ECs..
PILOT (payment in lieu of taxes) program reimbursements repay some of the money cities and towns lose on not being able to tax state-mandated tax-exempt property.
Under current legislation, each municipality is reimbursed by the state at the same rate — around 30 percent — for tax-exempt properties that qualify for the PILOT program (universities, hospitals, and state-owned property). That is, every town gets from the state 30 percent of what it would receive in taxes from PILOT-eligible properties were they taxable. Under the proposed legislation, the rate of PILOT reimbursement for a municipality would depend on the percentage of properties in that municipality that are tax-exempt. Towns and cities where more than 40 percent of property is tax-exempt would receive from the state 65 percent of what they would in tax revenue from PILOT-eligible properties if they were taxable. Towns with between 10 and 40 percent tax-exempt properties would be reimbursed at 50 percent, and towns with less than 10 percent tax-exempt properties would receive 35 percent reimbursement.
Both Hamden and New Haven stand to benefit from the change. Hamden would be reimbursed at 50 percent, as it falls in the middle range, and New Haven would be reimbursed at 65 percent, as more than 50 percent of property in the city are tax exempt.
Porter: “It’s about equity.”
The rest of the funding would be applied toward education, both through special education grants, and through the ECS formula, which the state uses to distribute education funding among municipalities. Under the proposed legislation, municipalities with the highest need would get more aid than they currently do.
“The problem historically,” explained D’Agostino, “has been that in order to get these aid formulas passed and deliver aid, every town gets a piece. So, when we started doing the ECS formula, Greenwich got aid! Greenwich has a mill rate of 12! 12! That’s insane that you pay more in taxes here in Hamden on a $400,000 house than a million-dollar house in Greenwich.”
Both D’Agostino and Porter said they fully support the bill. Logan, the lone Republican on the panel, did not.
“The best way to work towards ensuring that municipalities are receiving the aid that they are expecting … from the state is by improving the overall state economy,” he said, in response to the question about how to protect municipalities.
Proposals like Looney’s, he said, would just raise taxes, making Connecticut less attractive to businesses and families. “I just don’t believe that we can tax ourselves to prosperity here in Connecticut.”
Porter argued the proposed bill would not involve an increase in taxes, but rather a redistribution of them.
“It’s not about increasing taxes,” she said. “It’s about equity in taxes.”
Logan also added, later in the discussion, that the state had tried to reform the car tax before, and that in his opinion “it was an utter disaster.”
Looney explained to the Independent that in 2015, he helped sponsor a bill that capped the car tax at 37 mills. If a municipality had a mill rate higher than that, it would be reimbursed for the difference by the state. The cap later had to be lifted to 45 mills, and is no longer much help to towns. Looney said the program is now being phased out.
Regionalize Education
State Rep. Mike D’Agostino: Need to consolidate.
Later in the discussion, the moderator asked the panelists what legislation is in the works to improve Connecticut’s education system.
D’Agostino, who previously served on Hamden’s Board of Education, took up the mantle first.
He made two suggestions.
One involved special education: That the state could set up an insurance-like system for special education where towns would essentially pay a premium and receive funding from a centralized fund. Though the premiums might increase, he said, they would be predictable, allowing districts to weather unexpected costs.
His other suggestion was to consolidate smaller school districts in order to use resources more efficiently.
“Does the model of 169 school districts work?” he asked rhetorically. “It doesn’t … for a number of reasons. Certainly just from an efficiency standpoint.” He said some districts in the state are far too small, with graduating classes in the teens.
“Nobody wants to give up local control, I get that,” he said. “But right now, in the legislature there are proposals out there to require consolidation if your school district is below a certain size.”
The legislation he was referring to is another bill that Looney recently introduced. “An Act Concerning the Creation of Regional School Districts” would require the consolidation of smaller school districts.
“It is clear and universally acknowledged that we have too many small school districts in Connecticut,” Looney told the Independent. Having too many small districts is inefficient because small districts do not achieve economies of scale.
Looney said he based the bill on what he called the only example of successful district consolidation in Connecticut — of probate courts, back in 2010. That bill required that all towns with populations under 40,000 consolidate their probate courts with other towns. Before that bill passed, Connecticut had 117 probate courts. It now has 54.
Both D’Agostino and Porter said they support Looney’s bill, Logan again did not. He said he does support school district consolidation and regionalization. “However,” he said “I am not in favor of the state mandating to municipalities how to consolidate or how to regionalize.” He said the state should instead incentivize consolidation by providing more funding to districts that consolidate.
“I don’t agree with incentivizing,” Porter said. “Sometimes, unfortunately, we need to be told what to do.”
People don’t need incentives to do what’s right, she said. In Connecticut, she explained, education is tied to zip code, creating inequities in education, and those require more than incentives to fix.
“I will push back on the term achievement gap,” she said, “because I don’t like the connotation of that. These children are fully capable of achievement. It’s not an achievement gap, it’s an opportunity and resource gap.”
More Taxes Notes: