In a breakthrough compromise, the state Senate agreed to grant relief to East Rock homeowners bracing for a tax blow — as long as other homeowners get some relief, too.
The state Senate Monday night approved a bill that would allow New Haven to phase in property revaluations for all residential buildings with one to four units — not only the ones that are owner-occupied, as City Hall had sought.
The proposal comes as an amendment to Senate Bill 399, which also deals with local property tax solutions pushed by Hartford and New Britain.
The bill passed the Senate at 8:53 p.m. Monday by a unanimous vote. It now passes to the House, where State Rep. Bob Megna is waiting with an amendment. The clock’s ticking: The legislative session ends Wednesday night. The proposal was not on the House calendar of bills to be taken up on Tuesday.
Meanwhile, another top priority for New Haven at the legislature this session — a bill to allow for cameras atop red lights to catch runners — appears dead for yet another year. (More on that later in this story.)
The reval-fix bill represents a compromise from what Mayor John DeStefano originally sought in his Homeowner Fairness Initiative. DeStefano asked for state permission to phase in taxes for owner-occupied homes with one to four units; all other residential and commercial properties would get full implementation of the revaluation.
DeStefano’s proposal aimed to help a few thousand homeowners, many in East Rock, who saw an increase from 2010 values to the new 2011 values. Some were staring at a tax hike of as much as $10,000; others have protested they’d be forced to leave town.
Aldermen stood firmly behind the plan, while state legislators raised concerns about shifting the tax burden to other property owners.
Melissa Bailey Photo
Looney.
New Haven’s Martin Looney, the Senate majority leader, said the bill that passed Monday represents a compromise settled in light of legislators’ concerns.
“More people needed to get some relief, other than the affluent owners of owner-occupied homes,” he said. The new bill would send relief to owners of investment properties as well as owner-occupied homes.
Including more homeowners in the tax break would shift the burden to commercial properties, resulting in a slightly higher mill rate.
New Haven’s tax rate would be 40.96 mills under the Senate bill that passed, compared to 40.56 under DeStefano’s Homeowner Fairness Initiative. The current mill rate is 43.9.
“We didn’t have a strong feeling about the amendment,” mayoral spokeswoman Elizabeth Benton replied Tuesday. “It’s something we could live with.”
The House now has until Wednesday night to approve the bill.
Megna Pitches Alternative; Aldermen Pan It
New Haven state Rep. Bob Megna, the chief critic of DeStefano’s plan, has come forward with his own proposal: a five-year tax deferral.
Megna.
The measure, which would apply only to New Haven, would allow the city to adopt a property tax deferral system for owner-occupied, single-family homes. The system would allow such deferrals for five years, with $10 million in deferrals allowed citywide the first year tapering to $2 million the fifth year. The Board of Aldermen would be empowered to set an interest rate for such deferrals, not to exceed 6 percent annually.
To succeed, Megna’s plan would have to pass in the House and then in the Senate before midnight Wednesday.
“We’re trying to think of ways we can help without hurting other people in the city,” Megna said. The mayor’s Homeowner Fairness Initiative as originally proposed would protect some people, but result in higher taxes for others when compared to a simple implementation of new property values.
“It keeps everybody whole,” Megna said of his plan. “This is the first time in many years some taxpayers are seeing their bills go down, and it lets them see that benefit. … It’s something.”
Megna’s plan would mean that the city might have to borrow money to make up for lost revenue due to deferrals.
“If they borrow, they borrow,” Megna said. The interest rate on the tax deferrals would be greater than the interest rate on city borrowing, he said.
And the tax deferral interest rate would be a “heck of a lot less” than the 18 percent the city charges on tax deferrals now, he said.
“I don’t know what to do, because that Homeowner Fairness Initiative — it takes away from people,” Megna said. “When the mayor asks for legislation [like that] to me it’s a request to raise people’s taxes.” He said 80 percent of his homeowner constituents would see higher taxes under the mayor’s plan than under an unmodified implementation of the revaluation.
Megna’s plan is supported by New Haven state Reps. Pat Dillon and Juan Candelaria and state Sen. Toni Harp. State Rep. Roland Lemar is not on board. He represents East Rock, where many of the highest jumps in property values are.
Lemar.
Lemar noted the mayor’s plan is backed by the president, majority leader and president pro tem of the Board of Aldermen, by the chair of the Democratic Town Committee, and by other aldermen and constituents. No one asked for what Megna’s proposing, Lemar said.
“I don’t know who it helps,” he said. “I don’t know who would apply for such a thing. … It’s an entirely unworkable program.”
“This is a slap in the — This is not what they had asked,” said New Haven Alderwoman Alfreda Edwards Monday night in the Aldermanic Chamber in City Hall, where copies of Megna’s proposal were floating around. “I think this is the pits.”
Megna’s plan would result in a lot more homes up for sale, Edwards said.
“It’s definitely not what we were looking for,” said board President Jorge Perez. He said he was reserving full judgment until he had a chance to look into the proposal fully.
“I’m disappointed to see this amendment,” said East Rock Alderwoman Jessica Holmes. The city the mayor and the Board of Aldermen came together around the mayor’s plan she said. “I wish we had some more support” from the state delegation.
Megna’s proposal amounts to giving people an opportunity to take out a loan to pay their taxes, which is unacceptable, Holmes said.
East Rock Aldermen Justin Elicker also said he was disappointed in the proposal. “It just doesn’t accomplish the goal.”
People who can’t pay the taxes aren’t going to be able to sell their houses either, because they’ll have deferral debt attached to them, Elicker said. “Who’s going to accept it?”
Megna dismissed the argument. People who have bought a house for, say, $400,000 that is now worth $600,000 are not in a bad position, he said. They can sell their house and make a profit. “There’s a marketplace, if somebody wants to sell their home they’ll sell their home.”
Red Light Cameras Doomed
In other news, the red light camera bill that many New Haveners had pushed for this year appears to be dead.
The bill would have allowed some cities to install cameras to catch red-light runners, and send them a ticket of up to $50. The bill passed the Finance Committee in April.
Chances of it passing are now “pretty remote,” Sen. Looney said. That’s because of a late-game opposition by the NAACP, he said. The bill was aimed at towns with more than 48,000 people; it “primarily had an urban constituency.”
While safe streets activists in New Haven hailed the bill as a traffic-calming fix, others saw it as a “tax” on the poor, an invasion of privacy, and a money-maker for private industry.
When “the NAACP came out so strongly against it, that to some extent weakened its urban support,” Looney said.
“It’s unlikely that the bill will pass,” he said.
Rep. Lemar, who led the legislative effort, told the Courant last week he was scrambling to get together votes and was willing to make a last-minute compromise. Lemar could not be reached for this story.
""It's definitely not what we were looking for," said board President Jorge Perez. He said he was reserving full judgment until he had a chance to look into the proposal fully."
Ok Jorge. Then cut spending. Let's see you specifically come up with proposals to reduce spending so taxes don't go up. We want to hear concrete proposals from Jorge, who has been on the Finance Committee and the BOA as long as anyone. We hear you make objections to spending, but never see serious proposals to actually cut spending from you. You are BOA President again. Lets see you actually use that knowledge and position to cut the budget and not just talk about the budget - no more tokens.