Council Holds on House Bill Opposition Resolution
NEWINGTON - A controversial Senate bill aiming to reform the automobile property tax will get a longer look from public officials trying to figure out what impact the legislative proposal might have on Newington.

       The Town Council opted to hold off on taking action regarding a resolution against the tentative bill, after Town Assessor Steve Juda projected a potential net gain of more than $2 million in extra revenue from a formula that includes sales tax revenue distribution.

       The item will be on the agenda again at the Council’s June 9 meeting.

       â€"I haven’t heard anything to sway me one way or the other,” said Councilor Maureen Klett. â€"Initially, I thought the right thing to do was introduce the resolution-it’s such a difficult issue.”

       Councilor Beth McDonald had similar thoughts.

       â€"I’m not saying I’m for this or against this,” McDonald said. â€"We need to know more about this before we come out with anything on it.”

       What the Council does know as of now is that the bill would allow municipalities to establish an automobile Mill Rate that is separate from its general property tax. The state would cap the car tax at 29.36 mills--a provision that would have cost municipalities $82.6 million in car tax revenue if it was in place during the last fiscal year.

       By Juda’s projections, Newington will see an additional $3.2 million in sales tax revenue under the state’s proposed distribution formula, and $176,884 in PILOT payments, while losing over $1 million in car tax revenue. The result is a $2.4 million net gain, according to a breakdown that was distributed to Councilors at the meeting and summarized by Councilor Clarke Castelle in a later phone conversation.

       â€"If you take it at face value, there’s a net gain for the town in the short term,” said Town Manager John Salomone.

       But over the long-term, that is expected to come down, according to Juda. There’s also the possibility of the reimbursements stopping completely, he said. Case in point: the manufacturing tax exemption. Two years ago, Newington saw $2 million in annual reimbursements for lost revenue, but then it stopped.

       â€"The state has been notorious for passing something like this, and then down the road pulling it out from under you,” Juda said.

       Then there’s the issue of the sales tax. The current proposal calls 0.5 percent of sales tax revenue to be pooled for municipal revenue sharing--a provision that has already drawn some skepticism from those who see it as an unreliable and fluctuating stream of funding.

       â€"Does the sales tax revenue hold up?” Salomone said. â€"And if it doesn’t, what does that do to the formula?”

       The legislative session was supposed to close out on June 3, but Councilor Terry Borjeson said that legislators he has spoken to doubt that it will adjourn on schedule.

       The bill’s original language aimed to set a uniform Mill Rate for automobiles and pool local car tax revenue at the state level for redistribution to municipalities--a proposal that first prompted concern regarding the potential loss of tax revenue.

       While officials agree that the car tax system-which creates inequities due to varying municipal Mill Rates-needs change, they are not sure that this is the solution.

       â€"It’s not a good tax, but I’m not sure if they didn’t get too ambitious and try to fix all their tax issues in one bite,” Salomone said.
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