HARTFORD, Conn. (AP) _ Gov. Dannel P. Malloy on Thursday defended his proposal to slash local property taxes on vehicles, telling municipal leaders he believes strongly in providing the tax relief to middle class and working poor taxpayers.
In a three-page letter sent to every top local mayor and first selectman _ and obtained by The Associated Press _ Malloy said there are misconceptions about how his two-year $43.8 billion budget plan affects cities and towns, including the car tax proposal.
Malloy said his car tax plan does not take money from the pool of state aid sent to municipalities.
“It simply says that money that’s already raised locally, from your constituents, has to be done in a fairer way,” he said.
The car tax is seen as unfair because owners of identical vehicles with the same market value can pay vastly different tax levels based on where the vehicle is located.
Malloy’s plan, which applies to all motor vehicles except rentals, would take effect July 1, 2014. Municipalities could implement it earlier on July 1, 2013. It exempts the first $20,000 of a vehicle’s assessed value from the local property tax. That means someone who owns a car with a market value of under $28,571 would pay no property taxes.
Torrington Mayor Ryan Bingham, president of the Connecticut Conference of Municipalities, has said the proposal places “a potentially undue burden” on homeowners whose taxes would likely increase in order to cover the lost revenue from car taxes.
Malloy, in his letter, contends municipalities could reap savings in paperwork costs and trying to collect from delinquent taxpayers.
Given that car taxes make up between two and 10 percent of most communities’ tax bases, the governor, a former mayor of Stamford, said cities and towns “have a number of options available to them to make up for this, including spending cuts.”
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