HARTFORD, CT – A bill that would have repealed the municipal motor vehicle tax by increasing the rate of property tax assessments died in the Finance committee Wednesday. The bill, Senate Bill 450, would have used a five-year phase-in plan to repeal the motor vehicle tax, incrementally raising the uniform property tax rate from 70% to 90%.
The motor vehicle tax is seen by many in the legislature as “regressive,” but the bill did not garner enough support in the Finance, Revenue and Bonding Committee to be called for a vote.
Sen. John Fonfara, D-Hartford, said that the bill was not called because of uncertainty among members of the Democratic caucus in the committee about the impact of removing a steady stream of revenue from towns and cities across the state.
Fonfara, who co-chairs the committee, said in a phone interview following Wednesday’s meeting that he doesn’t think that language pertaining to the car tax is necessarily done for this session. But he said he doesn’t want to tell towns what they can and can’t do.
Committee co-chair Maria Horn, D-Salisbury, said in a phone interview that there is always reticence to changing the status quo, especially surrounding taxes. While incrementally repealing the car tax and instituting a higher assessment rate for property tax would be more progressive, she said, towns still have objections to changing their tax and revenue structure.
Part of that, she said, is municipalities not wanting to raise their mill rates. Horn said she talked to several of the first selectmen in her district, and most of them had a negative response to repealing the car tax. She said in theory that the legislature would like to do something about the “regressive” tax, but she doesn’t think anything more can be done this session.
“It feels like, maybe, now is not the right time,” Horn said.
The bill had considerable support from leadership in the legislature, with Senate President Martin Looney testifying in favor of the bill in a hearing before the committee this week. Looney said the motor vehicle tax is highly unfair and highly regressive.
“The property tax is problematic in many areas because of the fact, we know, that in addition to that windfall at the 70% level, we know in many cases that – because of how the taxes are structured – that in many areas there are some properties paying the same taxes as others are, but the value is much greater or much less,” Looney said Monday.
Fonfara said that he and Looney see eye-to-eye on incremental change, and that there are other options for finding a way to start getting rid of the car tax.
“There’s not a single person that doesn’t want to get rid of the car tax,” Fonfara said.
Fonfara said that making the car tax optional for towns is a possibility, but added that doing that could open another can of worms in making towns competitive against one another. In the case of an optional car tax, there would have to be some sharing of revenue between municipalities.
“I just feel we need to begin to move the needle, and then see what happens,” he said. Although, he said, it’s been “very difficult” to find a solution that can get through the legislature.
Sen. MD Rahman, D-Manchester, said in a statement Wednesday that he was disappointed that SB 450 did not make it out of committee, but that progress is being made. Rahman said the bill “narrowly fell short.”
“Big ideas often take years to pass and I look forward to continuing my efforts to repeal this unfair tax that puts a disproportionate strain on some members of our community,” the statement read.
Rahman was the chair of a task force – which concluded this February – that could not reach a consensus on the future of the car tax, and could not agree on the possible effects of repealing the tax.
