Governor M. Jodi Rell today renewed her call to state legislators to join her in providing real, direct property tax relief to Connecticut working families by permanently eliminating the car tax. The proposal will be included in the Governor’s state budget that she will unveil next week.

The Governor’s plan would eliminate the local property tax on privately owned or leased passenger cars, non-commercial pick up trucks and motorcycles over a five-year period starting July 1, 2007. As of July 1, 2011, Connecticut taxpayers would no longer have to pay the local car tax to the city or town where they reside.

“I am calling on state legislators to join me in making history by doing away with the burdensome, regressive car tax and putting taxpayers’ hard earned dollars back in their wallets - where it belongs,” Governor Rell said. “This is exactly what the working families of this state want, and as their elected leaders we owe it to them to see that it becomes reality.

“Connecticut vehicle owners will no longer have to dig deep into their pockets once or twice a year to send a check to town hall for their local car tax. Axing the car tax will make our state a more attractive place to live, work and raise a family.”

The car tax would be phased-out over a period of five years: in year one, there would be a $1,500 assessment exemption; year two, a $3,200 assessment exemption; year three, a $4,900 assessment exemption; year four, a $6,700 assessment exemption; and by year five, there would be a 100 percent exemption for taxpayers.

“Last legislative session, I heard from a few legislators who questioned my proposal,” Governor Rell said. “However, I’ve also heard from many hardworking taxpayers since I first introduced this proposal 12 months ago. They want real, direct property tax relief and they want it now. My plan to eliminate the car tax would do just that - permanently and for virtually all Connecticut taxpayers.

“State and local elected leaders have talked about providing real property tax relief for far too long and the people they represent have waited far too long for them to act. The election year is over - no more excuses. Let’s get it done now because this kind of substantive property tax relief is overdue.”

Under Governor Rell’s plan, cities and towns would be reimbursed by the state for lost tax revenue, assuming a 100 percent collection rate. A Casino Assistance Revenue (CAR) Fund would be established to use revenue from the casinos to fully compensate cities and towns. In addition, the property tax credit on the income tax would be phased down from the current $500 level to offset any lost revenue to the state’s General Fund.

However, since some senior citizens no longer drive, own older cars or have limited income, Governor Rell said those 65 or older who are single filers, heads of households or joint filers (one of whom must be at least 65) would be able to keep the $500 property tax credit and not pay the car tax as well.

“My plan gives local elected officials and municipal tax collectors peace-of-mind knowing their town will be reimbursed 100 percent for any lost revenue,” Governor Rell said. “I want to be clear: no city or town will be shortchanged because we have a plan to pay for this needed tax relief. In fact, the 100 percent reimbursement municipalities receive from the state will actually be higher than what many of them collect now.”

In Connecticut, over two million passenger cars are registered with the state. The local property tax on vehicles does not discriminate based on income but does affect taxpayers depending on where they live and what kind of car they drive.

Governor Rell will unveil her new, two-year state budget before the General Assembly on February 7.