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Malloy Chief Says No To $5M for Three Towns For Car Taxes

Malloy Chief Says No To $5M for Three Towns For Car Taxes

CT News Junkie, January 11, 2018

by Christine Stuart

HARTFORD, CT — The three communities seeking more than $5 million in supplemental vehicle tax payments from the state will have to take their argument to the legislature.

In a Jan. 3 letter to Office of Policy and Management Secretary Ben Barnes, the mayors of Bridgeport, Hamden, and Torrington asked that the office release about $5 million in supplemental motor vehicle tax payments that the administration decided to hold back in November.

Barnes told them in a Jan. 5 letter that he was unable to do that.

“Unfortunately, I do not believe that OPM is in a position to approve the release of these funds until the legislature takes up deficit mitigation,” Barnes wrote. “Bluntly said, I cannot make matters worse without addressing the more than $200 million in deficit we face this year already.”

He said Monday that he is sympathetic to their plight, but until the legislature resolves the current budget deficit, his hands are tied.

The three towns are the only ones with mill rates above 39 mills that were impacted in this way by the new two-year budget negotiated by the General Assembly and signed by Gov. Dannel P. Malloy on Oct. 31.

The three towns’ revaluations were not considered in the motor vehicle tax reimbursement calculation for the new budget, which means the towns are not going to receive money to cover the difference between their mill rates and the state-mandated cap on car taxes, which is 39 mills.

“As a result of this discrepancy in motor vehicle tax reimbursement, our cities are facing unfair hardship including millions slashed from already lean budgets, and potentially mid-year layoffs of teachers and 2 closing schools, threatening the quality of education and life in our communities,” the three mayors said. “This particular discrepancy — in our view — also violates the principles of the original SB1 proposal to make municipalities whole for lost motor vehicle tax revenue while capping the mill rate on cars to give our residents much needed tax relief.”

Lost car tax revenues in Hamden back to top

Hamden Mayor Curt Leng said his town will lose $2 million in motor vehicle tax revenue, which was supposed to be covered by the state.

To continue the new mandate without offsetting the millions lost is simply unfair to our local property owners and businesses who will otherwise be forced to shoulder the added burden,” Leng said Tuesday. “Without this fix being fully implemented, then we need to call this motor vehicle mandate what it is for communities like Hamden, the ‘CT motor vehicle forced tax hike’.”

Leng said he hopes legislators solve the problem. He said he’s gotten assurances they will. 

Legislators, who held a special session Monday to restore $54 million for the Medicare Savings Program to helps more than 100,000 elderly and disabled pay their Part B premiums and co-pays, are working on deficit mitigation plans.

House Speaker Joe Aresimowicz, D-Berlin, said they will be coming in within the next few weeks to tackle the $224 million deficit in fiscal year 2018.

Both Democratic and Republican legislative leaders said they are working on their plans, but are unlikely to release them until after the consensus revenue estimates are released on Jan. 16.

At the end of December, Gov. Dannel P. Malloy presented legislative leaders with options for more than $303 million in spending cuts and tax increases.

Aresimowicz said he hasn’t taken anything off the table as far as closing the deficit.

House Minority Leader Themis Klarides, R-Derby, said she’s not looking at tax increases as she puts together her deficit mitigation plan.

Senate President Martin Looney, D-New Haven, who represents Hamden, said he believes the three communities should get the funding.

It was immediately unclear if the funding would be restored as part of a deficit mitigation package.