Senate President Martin Looney admits it’s an ambitious proposal, but he believes his proposal to create a statewide mill rate for motor vehicle taxes is rational.
Nobody believes the current system — in which a motor vehicle is taxed at one mill rate in Greenwich and a different tax rate in New Haven — makes sense, he said.
“A car is a car is a car,” Looney said Thursday in a phone interview.
Looney’s proposal, which is wrapped up in a larger bill, would exempt the first $3,000 of a vehicle’s value and set a statewide mill rate for all motor vehicles. He estimated that if the mill rate was set at 29 mills and collected by the state it could be redistributed to cities and towns. Looney said every town would be made whole and wouldn’t lose any money.
The bill, which included language regarding the creation of the statewide mill rate, was forwarded Friday by the Planning and Development Committee to the Finance, Revenue, and Bonding Committee.
Lawmakers and municipal lobbying groups are skeptical that the state would actually get the money to the cities and towns.
Rep. Bill Aman, R-South Windsor, said he has a major problem with the motor vehicle tax and how that’s actually going to be done when in the past the state has swept the revenues it’s promised municipalities.
The Connecticut Conference of Municipalities and the Council of Small Towns have also expressed concern.
It’s estimated that the motor vehicle tax raises between $700 million and $800 million in revenue for municipalities.
Betsy Gara, executive director of the Council of Small Towns, testified earlier this month that the state has a “tendency” to take money from municipal accounts “particularly when the state must address budget deficits.”
Matthew Galligan, South Windsor town manager and president of the Connecticut Conference of Municipalities, testified that while members appreciate the intent behind the proposal, they are concerned about the state collecting the money.
Senate Republican leader Len Fasano, R-North Haven, said he’s also concerned as a taxpayer that if he lives in a town with a mill rate that is lower than the average proposed, his tax dollars will be sent to another municipality where he doesn’t get a say on how they run their government.
“It raises the issue of taxation without representation,” Fasano said.
He said if there’s going to be a statewide mill rate then there needs to be transparency in municipal budgeting.
Two years ago, municipal leaders successfully beat back Democratic Gov. Dannel P. Malloy’s proposal to eliminate the motor vehicle tax. A few years before that, Republican Gov. M. Jodi Rell tried and failed to eliminate it too.
Sen. Steve Cassano, D-Manchester, said there are a lot of “dramatic” changes to the property tax system included in Looney’s bill and they want to forward it to the Finance Committee to get it “costed out.” Until then, many Democratic lawmakers are waiting to see what happens before commenting on the proposal.
In addition to the creation of a statewide motor vehicle tax, Looney’s proposal would change how the state reimburses towns for tax exempt property under the PILOT grant and would create a regional tax sharing system for large development projects.