A bill introduced earlier this month by Gov. Dannel P. Malloy that would allow residents to register their vehicles, even if they haven’t paid their delinquent property taxes, was panned by municipal leaders and praised by car dealers.
Municipal officials told the legislature’s Transportation Committee on Monday that the bill would conservatively cost municipalities more than $33 million in revenue.
Gengras, president Connecticut Automotive Retailers Association, said Connecticut auto dealers currently do 40 percent of all registrations in the state.
“We are the only retailers that have to stop sale of a product if our customer hasn’t paid their taxes,” Gengras said.
He said that’s why they are supporting Malloy’s legislation to shorten the lines at the Department of Motor Vehicles.
But municipalities hate the idea because they feel it would limit their ability to collect delinquent taxes.
Litchfield First Selectman Leo Paul said the Connecticut Tax Collectors Association estimated that municipalities will see a 5 percent reduction in the collection of motor vehicle taxes.
That means Litchfield would lose about $105,594 in revenue. But Paul believes that’s conservative because this year alone the town has recovered $407,000 in delinquent motor vehicle taxes.
In cities like Hartford, 5 percent would be around $1.2 million and in New Haven it would be around $917,000, according to the Connecticut Conference of Municipalities.
“The need to offset this revenue loss would fall on local taxpayers who have met their obligations to pay their taxes,” Paul said.
Paul said they are not asking the Department of Motor Vehicles to be a tax collection agency for cities and towns. He said they should be partners in this effort.
“The ability of the DMV to deny a registration to someone who owes delinquent taxes is simply an effective way to assist our towns and cities,” Paul said.
But the Malloy administration sees the issue differently.
“This is simple — you’re either for longer wait times, or you’re against them,” Malloy spokesman Devon Puglia said.
He said the core function of the DMV is to provide licenses and to register vehicles, “not to collect a $50 ticket on behalf of a municipality. The DMV should not be in the local property tax collection business.”
Rep. Antonio Guerrera, who co-chairs the Transportation Committee, wondered if they could install kiosks at the DMV that would allow a person to scan their license to determine if they have any delinquent taxes before even getting in line.
Acting DMV Commissioner Dennis Murphy said they do have kiosks on site that they are testing that could allow them to implement such a system.
The legislation also looks at allowing a third-party vendor like AAA to handle registration, in addition to licensing.
Guerrera said he’s torn over the tax collection issue.
“Every tax dollar we can get is going to help our towns,” Guerrera said.