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State Budget Director Ben Barnes: Most Residents Will Benefit From Car Tax Shift

February 9th, 2013 · 18 Comments · Analysis and Comment, City Budget

Governor Dannel Malloy’s budget director Ben Barnes, in a comment he posted on OIB writes the governor’s proposal to put the brakes on auto taxes “does indeed assume that communities will make up most or all of the lost car taxes with a shift onto other property taxpayers.” City bean counters are reeling from the governor’s budget proposal that if passed by the legislature will cost the city roughly $17 million in revenue. No problem, says the state’s chief bean counter, the revenue will simply be shifted to “other” property taxpayers. But what will the residential tax rate be? How will this plan impact businesses considering the city? Is this a shell game? Barnes’ comment follows:

The governor’s proposed elimination of the car tax does indeed assume that communities will make up most or all of the lost car taxes with a shift onto other property taxpayers. Since some of those taxes are paid by absentee property owners, businesses and owners of taxable personal property, the shift should favor residents, particularly renters and lower-income residents. Bridgeport, and every other city and town, should do the math before jumping to conclusions about what this will mean. Overall, most Connecticut residents will benefit from this change, depending on what kind of property and cars they own.

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18 Comments so far ↓

  • Andrew C Fardy

    Mr. Barnes is full of shit. How much does he think the homeowners in Bridgeport can pay? We are up to our necks in taxes now. I have a question for Barnes and that dumb-ass Malloy, when does the down and out homeowners of Bridgeport get a break? I did not vote for Malloy and I am glad I did not. These freaking people think those of us living in the cities can just keep paying and paying. I must remind these two this is not Westport.
    If you want to give up the motor vehicle tax then let us tax the non-profits at the correct amount. after all many of them are buying up taxable property for expansion and thus more jobs for the ‘burbs.

  • CT Taxpayer

    I am offended by Mr. Barnes. I do not happen to be a renter or a lower-income resident, but I am a homeowner on a pension. My taxes will no doubt increase, not only because of the proposed elimination of the automobile tax, but also because of the increases to education he has no way to fund–except by cutting aid to cities and towns. Unlike Mr. Fardy, I did vote for Governor Malloy, but given what he has done with the profiteers who have entered Bridgeport’s school system, as well as with the commissioner of education who has never been an educator, I have no intention of voting for him again. I do not expect him to be in office after this term.

  • The Cisco Kid

    Unreal! How much burden do these people think the working homeowners of our cities will tolerate before they all just pick up and leave; or are they just arrogant enough to believe these people will just give up hope and take it.

    This will go especially hard on Bridgeport because literally half the city’s properties are not taxable. That means that as usual there will be a much smaller pool of folks to shoulder the proverbial LOAD.

    The only silver lining I can see coming from this is Bridgeport may finally hit the rock bottom that seems to be more and more necessary for a major cultural and political shift due to the lack of any working people left in the city to pay for all the conspicuous expenses of the city.

  • BOE SPY

    Really? So Ben supports his boss’s budget plan. Is that an odd thing for an appointed government official to do? One problem Ben, the businesses and landlords will just pass that tax increase along to consumers and tenants or close down and move away. This assumes the inevitable property tax increase is spread evenly across residential and commercial properties. I do not think that is likely because businesses can close down and move away. For homeowners that option is not so easy. Many homeowners already can’t sell their house and increasing the tax on it will not make that easier. Very wealthy people, like the ones who used to live in all the empty houses on Sailor Lane, will just move away. This will leave middle income and poor to carry the burden. Google Connecticut’s median income over the last five years and notice the decrease. This could be because the average wage in Connecticut has been dropping or it could be due to very wealthy people leaving because it is just cheaper, considerably cheaper, to live somewhere else. Does anybody remember when our state income tax was just a temporary thing until our budget deficit could be fixed???

  • Jimfox

    If the Governor wants each city and town to go its own way on taxes, then let Bridgeport open a casino.

  • BOE SPY

    Let’s say you own Modern Plastics and after all is done you make $1 mil/yr on your federal return. That would mean you pay $65K to CT. You also pay $15K on your $500K house at 30 mils. Now, you call Washington state and work out a deal to move your company there. This deal makes the move free. You would save $65K/yr in income tax. If you walk away from your house you would break even in 7-1/2 years. But you own the bank $300K on the house. So you only have $200K in the place. That means you break even in just over 2 years. You buy a $500k house in WA and get twice the property and twice the house at 15 mils, saving you another $7.5K. Your labor expenses drop in half and other than some short-term training, supply and delivery problems, your business goes on.

  • Mojo

    *** Off Topic: Lots of snow and not one snowplow has passed down Wordin Ave, a traffic artery on and off I-95. Go figure! This will be a snowstorm to tell your grandkids and great grandkids about, no? *** GUESS MOTHER NATURE WILL PLOW THE STREETS ***

  • yahooy

    It’s a good thing Jasper’s not Mayor anymore.

  • Sunshine96

    Helllooo BOE!!! Let’s say businesses like Modern Plastics up and move to Washington state. Hmmm! Who’s left? Could it be the newly minted “lower middle class” folks? The people who work their asses off just to get by? Wouldn’t it be nice if we could just up and leave the homes we have spent most of our lives and money in? Not sure how that will work. Maybe you could explain that a little better for those of us who are trying to keep our families’ heads above water on $125K or less. Any suggestions?

  • Pat Fardy

    Why don’t our city tax attorneys try to get the state to divide a fair share of all of the “TAX EXEMPT” properties that are in Bridgeport? The percentage has to be over 50% tax exempt due to all of the hospitals (that out-of-towners use) and Churches (legitimate or not). There are storefront churches on every block and those persons get tax exempt for their cars and that property (where they reside).
    So unfair.

    • carolanne curry

      Pat Fardy // Feb 9, 2013 at 3:17 pm
      To your posting

      Pat,
      You have come closest to the reality that must be faced in all of Connecticut’s 169 towns: tax-exempt properties is an unaffordable luxury for towns. Especially towns like Bridgeport.
      The City Council can take the lead here and begin the discussion that introduces a property tax at long last where it must be considered. A “non-profit rate” that is a lesser mil rate is the place to start.
      What do you think?

      • Pat Fardy

        I am not sure what the tax rebate share is called by the state, but do know when it’s shared by our neighbors, Trumbull and Fairfield, it is divided by 3 equally, why should Bridgeport get only 1/3 when we have 100% of the tax-exempt properties? I am not sure of the percentages but close enough. Enough is enough.

  • Mojo

    *** And let’s not forget the non-profit services that are provided to our neighbors Trumbull and Fairfield for their needy citizens that they cannot provide! They should be charged accordingly and the tax rebate share is a good place to start, say Bpt 50%, Trumbull 25% and Fairfield 25%??? ***

  • Pat Fardy

    Yes, but 80-10-10 sounds better to me … lol
    Bridgeport has at least 52% of Non Taxable properties and that number is increasing with more nonprofit groups filing to use some more properties including Bpt Hospital and St. V’s.
    Bridgeport hospital possibly taking over Harding HS property, which I know is now non-taxable, but that is a lot of visible property on a major roadway that could be used for retail and then tax revenues.

  • Ben Barnes

    Wow. Such vitriol.

    But on the subject of car taxes, I did a little homework. The data I used came from two sources. First, the CT OPM website (www .ct.gov/opm) that has a spreadsheet of all the components of each town’s grand list. The data is a couple of years old, but these things change slowly, and I can’t get into the office to track down more current information because they haven’t plowed my street. The second is the Vision Appraisal website that shows current assessments on all Bridgeport real estate.

    Motor vehicles make up $375 million out of Bridgeport’s $7.2 billion grand list. Today, the mil rate is 41.11. If I remove 95% of the motor vehicle assessments (because some cars and trucks are worth more than $28,500), and recalculate the mil rate to generate the same amount of money, the mil rate goes to 43.25, an increase of 5.2%.

    Next, I looked up the assessments on three houses. First, on Hallock Street in the North End. At $136,300, the tax is $5,603. With the mil rate at 43.25, the tax will be $292 higher. If I calculate correctly, if the owner of that house also owns a car (or more than one) worth more than $10,150 (market value) then she will come out ahead.

    The next house I looked up is in Black Rock on Lake Ave, assessed at $248,700 and taxed at $10,224. The owner will see a tax increase of $532, still well below the single car exemption of $822.

    Third, I looked up a very fancy home on Brooklawn. Assessment: $386,500; tax: $15899; potential increase: $827. Even that taxpayer, if she owns more than one car, or has a new car, would break about even or come out ahead.

    I appreciate a homeowner on a fixed income and no car would struggle a little more under this change. I also understand the businesses and non-resident property owners who would make up the taxes are stressed already. In balance, I think this change will help places like Bridgeport, and most of its residents. Maybe we need to consider other steps to protect seniors, for instance. In any event, that’s why we have a legislative session every year–to debate policies and proposals, and sometimes to improve them and pass them into law. This proposal deserves such debate.

    On another note, the Governor’s combination of PILOT into ECS does NOT trigger increases in education spending because the Minimum Budget Requirement language in the proposal exempts that funding. Nothing in the governor’s budget does anything new with respect to making Bridgeport spend money on education. It’s the same formula as last year in that respect.

    • Pat Fardy

      “Maybe we need to consider other steps to protect seniors.” In reference to the above there used to be a tax freeze for seniors, which was a wonderful thing for seniors on fixed incomes. That has been eliminated by the tax dept … WHY?

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