In a prepared statement issued Wednesday (March 13) state Reps. Jason Perillo (R‑113) and Themis Klarides (R‑114) criticized Gov. Dannel P. Malloy’s proposed elimination of the motor vehicle tax, saying the move will end up costing middle-class residents even more money.
The Malloy proposal would exempt a vehicle’s first $20,000 of assessed value from local property tax. Anyone with a vehicle at a market value of $28,571 or under would pay no taxes on their vehicle.
According to the legislature’s nonpartisan Office of Fiscal Analysis, this would result in a loss of $633 million for municipalities across the state, and a precipitous drop in revenue of $6.2 million for Shelton, and $2.1 for Derby.
“As most municipalities finish crafting their local budgets months before the state does, these towns will be negatively affected if this car tax proposal passes, and forced to reopen their budgets because of this artificial emergency,” Perillo said in a prepared statement.
The lawmakers noted that while it may sound tempting to eliminate the tax, the proposal doesn’t translate into any savings by local taxpayers.
“It’s quite the opposite actually,” Perillo said. “Whatever local government loses from car taxes will have to be made up somewhere else, and that somewhere else is still your pocket. You’ll be taxed at a higher rate on your property, and the likely result is that most middle class residents will end up shelling out more than they just paid their car taxes. This proposal hurts many and helps none.”
Click here for a CT News Junkie story in which Malloy defends his plan.
“While eliminating the car tax seems beneficial on the surface, in actuality it significantly shortchanges municipalities who will be forced to raise property taxes to make up the loss,” Klarides, a member of the Appropriations Committee, said in a prepared statement.
Klarides went on to call Malloy’s car tax plan a gimmick.
“Eliminating one source of revenue only to increase another is not tax relief, it is a fancy shell game that leaves struggling municipalities in deficit,” she said.
Perillo said Malloy’s plan will force Valley government to raise taxes on homeowners.
“And the increase would be significant. This isn’t the first time such a proposal had been offered — Gov. Rell proposed it several years ago. The difference between the Rell proposal and the Malloy proposal is that Governor Rell found a way to pay for the transition and make towns and cities whole for the loss. Gov. Malloy isn’t doing that.”
Click here more information on the old proposal from Rell, which was eventually scrapped.
