Trying to predict the end of Connecticut’s budget crisis is akin to guessing the denouement of a cinematic thriller you know nothing about. A handful of renegade Democrats have joined Republicans in the Democratic-controlled General Assembly to pass an alternative GOP budget that Democratic Gov. Dannel P. Malloy has vowed to veto. Lawmakers will then have to reconvene and try to come up with a bipartisan spending plan that everyone can live with. Machinations are no doubt in the works. It’s enough to make your head spin.
But one thing caught my eye as the legislature’s Finance, Revenue, and Bonding Committee adopted a two-year revenue package — you know, the one that wound up being replaced by the Republican alternative. Tucked inside the document was a revenue line allowing officials to “establish a state property tax on seasonal and recreational homes.”
The nonpartisan Office of Fiscal Analysis has estimated the extra 5 mills (or $5 per thousand of assessed value), added to a property owner’s existing municipal taxes, would generate $32 million for the state in each of its first two years.
Ever since the state’s first income tax was instituted in the early 1990s, lawmakers have been looking for another potentially large source of untapped revenue. Alas, there are no single bountiful options left, so Democrats in the legislature have cobbled together a collection of possible items that, taken together, could produce steady streams of cash: a surcharge on cell phones, for example, or additional taxes on hotels, meals, and hospitals.
But the tax on part-time homes really caught my attention. I live in the far-northwest-corner town of Salisbury, which has a population of about 4,000 full-time residents and more resembles Vermont than Connecticut. On the weekends, it seems like the population doubles. The best guesses I’ve heard is that about 60 percent of the homes within the town’s borders are owned by New Yorkers and others from exotic locations like New Jersey and Fairfield County.
Disclosure: I count many part-time residents among my friends and at one time owned a one-man house-watching business that catered to weekenders and others who were unable to keep an eye on their homes while in the city. So take my opinion on this proposed tax — or formerly proposed tax — for what it’s worth.
As a columnist, I’ve always been reluctant to speak directly to people’s motives. It’s nothing but trouble. But I do think it’s worth asking the legislators who endorsed this idea: Would you have done so if the people affected by the special state tax could vote?
I’ve never been a fan of legislators taxing those to whom they’re not accountable — and the vast majority of Connecticut’s second home owners are registered to vote elsewhere — mostly New York. Granted, out-of-staters are taxed in a variety of other ways: when visiting, they’re subject to our sales and hotel taxes, for example. But they’re taxed at the same rate as we are.
A special property tax on second home owners is certainly not unprecedented. Vermont, for example, does the same thing. It taxes out-staters at a special rate to fund local education, though the mill rate to fund other municipal spending remains the same.
State Sen. L. Scott Frantz told the General Assembly’s finance committee the statewide property tax on seasonal homes will be an “unmitigated disaster” like it was in Vermont, adding that the real estate market in the Green Mountain State still hasn’t recovered.
Complaints in Vermont about property taxes are common, but whether its dual-rate policy has been disastrous is anyone’s guess. What I do know is it’s wrong to tax at a different rate people who can’t vote for you. While second homeowners in Connecticut do have the right to vote in town meetings, their homes are not taxed at a different rate. And that’s the way it should remain.
And the Self-Inflicted Wound Award Goes To…
You’ve got to hand it to Middletown Mayor Dan Drew. He just managed to torpedo his own gubernatorial campaign before it even got off the ground. In one of the most boneheaded moves ever pulled by a candidate for statewide office — the state’s highest, no less — Drew sent out a letter soliciting city employees for a donations to his campaign.
There are so many things wrong with this tactic that I scarcely know where to start. I have no idea whether this runs afoul of the law. But I’m sure the State Elections Enforcement Commission will make a determination after receiving the inevitable barrage of complaints.
My guess is the powers-that-be will take a dim view of a boss who asks his employees to give to his own political campaign. Would it not be an act that creates a hostile work environment? Moreover, if one of Drew’s employees declines to give to his campaign and is later fired — even for an unrelated reason — would the employee have grounds for a wrongful termination suit? After all, Drew is the one who negotiates contracts with city employees.
This is just so foolhardy. As you would expect, Republicans in Middletown have jumped all over this. But even City Council Majority Leader Thomas J. Serra, a fellow Democrat and former mayor, has said that Drew’s action was “inappropriate” and “not a good decision to make.”
Yesterday, Drew apologized for his “error in judgement” and has vowed to refund the donations. But one of his Democratic rivals for governor, former federal prosecutor Chris Mattei, has seized on the issue, calling it “wrong — plain and simple” and adding that, “The question for Connecticut is whether we will finally choose a new kind of politics for our state.”#8221; Ouch! Echoes of Corrupticut!
Will Drew’s campaign survive this? At this point, it probably doesn’t matter. On the issues that confront us, Drew has boldly called for exactly the kinds of measures that have helped to run the state into the ground: higher spending and higher taxes. In the unlikely event that Drew is the nominee, his Republican counterpart will eat him for lunch.
Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at ctdevilsadvocate.com and is managing editor of The Berkshire Edge in Great Barrington, Mass. Follow him on Twitter @terrycowgill.
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