Besides maybe the possibility of zoning reform, there’s nothing that upsets the wealthy and the upper middle class in Connecticut more than a proposed tax hike that applies only to them.
Senate President Martin Looney, D-New Haven, recently proposed a statewide property tax that would apply to homes valued above $430,000. Looney’s plan would raise property taxes by one mill for each of these homes, and then redistribute the money to needy communities. This could help cities like Hartford, Bridgeport, and New Haven, where property taxes are staggeringly high.
Before we get to the moaning and the hand-wringing, this would not be a break-the-bank kind of tax. According to Paul Bass at the New Haven Independent, someone with a $500,000 house would pay about fifty bucks extra in tax every year, while someone with a million-dollar home would fork over about $400. If that seems like a lot, let me remind you that these are people who spent upwards of $430,000 on a house.
The money would help reimburse towns where nonprofit property is exempt from taxes. Cash-strapped New Haven, where a lot of land is owned by Yale University, would see enormous benefit from the plan. Looney calls his plan “property tax reform,” and on that, he’s not far off.
Because our cities and towns are almost exclusively funded through property taxes, there’s a lot of inequality when it comes to who gets taxed and how much. Wealthy towns with plenty of valuable private property to tax can keep their mill rates low without compromising the quality of the relatively few services they offer. That’s the property tax functioning as it was intended. Property taxes also worked well when larger towns and cities had a strong manufacturing base.
Unfortunately, when the factories pulled out, leaving huge swaths of contaminated, dirt-cheap land behind, cities had to find a way to fill that hole in their budgets. At the same time, demand for services increased as the suburbs embraced exclusionary regulations to keep poverty and its attendant problems confined to the city limits.
The result was that cities with very little land available for development, large numbers of un-taxable government or nonprofit properties, and high concentrations of poverty were forced to raise property taxes through the roof in order to survive.
Once you can afford the entry fee, a rich town is a lot cheaper to live in than a city. For example, a car registered in Hartford will cost seven times as much in tax than the same car registered in Sailsbury.
Therefore a tax on more valuable homes, mostly in rich towns with low mill rates, is really a way for these suburbs to shoulder some of the burden they’ve been avoiding for decades.
So what about that number, though? $430,000 sounds like a lot for a house, but I live in a town where real estate is cheap. $430,000 would buy you not one, not two, but three of the nicer houses on my street – with enough money left over for a partial down payment on a fourth. That seems like Scrooge McDuck territory to me; just put the money bin out back.
And yet, Fairfield County folks, I am not unsympathetic. It’s expensive to live anywhere in your part of Connecticut, right? A recent editorial in the Greenwich Time lays out the facts for us: it’s impossible to find a stand-alone house in Greenwich for under $430,000. Therefore pretty much the whole town would have to pay the tax!
I don’t know, but saying “our town is completely unaffordable” may not be the best argument against the tax, here. But where else would people in that area live? It’s not like New Canaan or Ridgefield have tons of affordable housing, either.
What if I told you that there’s a way to own a three-bedroom, two-bathroom standalone house with a yard, convenient to public transportation, in great condition, in Fairfield County for less than $200,000? Would you jump at it?
Sure you would! Great. It’s in Bridgeport.
Still interested?
… That’s what I thought.
Look, these are awful times. The pandemic is ripping the economy to shreds as we all try to stay safe and healthy. When the pandemic is over, which someday it will be, we’re going to spend years recovering. The people who have the least will be the ones who suffer the most in the meantime.
If there was ever a time to raise taxes on people who can afford it, now is that time. Because if not now, when?
Susan Bigelow is an award-winning columnist and the founder of CTLocalPolitics. She lives in Enfield with her wife and their cats.
The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.