Newington Could Lose Millions With Car Tax Cut
NEWINGTON - Newington would see a $7 million loss in state funds if Governor Dan Malloy goes through with his proposal to eliminate the car tax, Newington officials said on Friday.
Malloy is looking to eliminate an existing property tax on vehicle worth less than $28,000, a move advocates say will ease the burden on some owners. But the added costs to the towns will fall back on residents, said Newington Councilor Jay Bottalico.
“You gotta make that money up,” Bottalico said Friday. “How do you do that? You gotta go to tax payers.”
With budget meetings already in session, towns have to allot their finances without knowing for sure if the final figure will be altered at all. Newington needs to have its budget finished by April, while the state’s own plan will not be ready until July, Bottalico said.
“We’re just gonna have to assume that it’s not going through,” Bottalico said.
And if it does?
“I don’t know how the town manager would handle that,” he said. “We’d probably have to go back and adjust everything.”
Luckily for towns like Newington, it seems unlikely that it will pass amidst its widespread unpopularity, illustrated by the backlash from municipal officials, said Newington Councilor Terry Borjeson.
“I would be shocked if it happened,” Borjeson said. “We’re firmly opposed to it, and legislators I talked to said it probably wouldn’t happen in the current form, but it’s open to negotiation.”
Over in Wethersfield, where the proposal would amount to a $5.4 million loss, town officials are not taking any chances. With its own budget deadline set for May, the town will probably have to plan for both scenarios, said Wethersfield Deputy Mayor John Console.
“We would have to plan both ways in case the changes happen,” Console said. “It puts a lot of burden on the town.”
Not only would Wethersfield have to make up for the loss of revenue in increase property taxes, it would also lose a portion of its base, Console said.
“People renting apartments wouldn’t be paying any taxes,” he said.
The existing automobile tax utilizes a mill rate--the number multiplied by a given property value and then divided by 1,000 to come up with the property tax. This standard is in place for houses and buildings, but Borjeson was skeptical as to whether or not it should be applied to automobiles since the number differs from town to town.
Newington’s mill rate is 32.64, according to Borjeson.
“That works on the building side, but cars are not unique,” he said. “A house in Simsbury is gonna be different than a house in Newington, but a car doesn’t change. I think, personally, they should have a standardized rate across all towns. I think that’s a fair way to do it.”
Since local mill rates are tailored to meet the tax needs of the respective community, a uniform standard might be detrimental to places like Hartford, where the figure is almost twice that of Wethersfield, Console said. Hartford’s mill rate is 74.29, compared to Wethersfield’s 32.58 as of 2011, according to Realty3CT.com.
“In a city like Hartford, they would still have to make that up somehow,” Console said. “So that would pass to the citizens and businesses.”