The state’s largest municipal lobby is trying to convince the Senate to amend House Speaker Brendan Sharkey’s pet legislation that changes how the car tax is levied in the state.
Legislation passed early Tuesday morning by the House caps the maximum mill rate on motor vehicles in 2014 and gradually reduces the cap in future years until the tax is eliminated. The mill rate would be applied statewide, so it wouldn’t vary from town to town like it currently does. In order to make up for the loss in revenue, the bill also creates a “Municipal Reimbursement and Revenue account” which will be distributed to towns by the state.
But the Connecticut Conference of Municipalities says it’s not enough.
“CCM opposes the proposal to eliminate local revenue levied from the tax on motor vehicles—without concrete assurance of a reliable, supplemental funding source,” CCM CEO Jim Finley, said. “The debate was never about the fairness of the car tax, which all agreed is inequitable, yet it was how do we keep our hometowns from going over a fiscal cliff by eliminating a $700 million critical revenue stream.”
Sharkey remained confident Tuesday evening that the Senate would be doing the bill and getting it to the governor’s desk.
Eliminating the motor vehicle tax is something Gov. Dannel P. Malloy proposed back in February, but he didn’t include any state revenue to replace the money municipalities were able to levy through the tax.
“I’m confident we’ll be doing the bill one way or another,” Sharkey said.
He said the legislative proposal is actually more accommodating because it attempts to start a fund to replace the revenue. Under the bill passed by the House shortly before midnight, nothing would change for almost every town in the state for four years, Sharkey said.
In October 2014 the statewide cap on the mill rate would go into effect. The cap would start at 80 mills and the only city with a mill rate near the cap is Hartford.
The equalized mill rate in Connecticut at the moment is about 28.9 mills. Hartford’s mill rate is one of the highest at 74 mills, which means they wouldn’t begin to lose revenue under the proposal until the second year.
In the second year the cap would drop by 8 mills and the following year by 12 mills until eventually it’s eliminated by 2020.
Senate isn’t expected to take up the legislation today because it hasn’t been on its calendar long enough. Wednesday is the last day of the legislation.