Durham and Middlefield Would Lose Combined $3 Million if Car Tax Were Eliminated

Earlier today, the Connecticut Council of Small Towns (COST) and Connecticut Conference of Municipalities (CCM) criticized Gov. Dannel P. Malloy's proposal to eliminate local motor vehicle taxes during a hearing before the legislature's Finance, Revenue, and Bonding Committee.

Under the proposed bill, municipalities would be forced to eliminate the tax on vehicles assessed at $20,000 (full value of $28,571 or less) by July 1, 2014.

According to figures from the state's Office of Fiscal Analysis, Durham stands to lose $1,941,771 under the proposal, while Middlefield would lose $1,039,871.

Malloy has offered the plan as tax relief for the middle class, arguing that car taxes don't provide as much local revenue as officials believe because it is difficult and costly to collect, according to a report on the website Ct News Junkie.

But officials have been critical of the proposal, saying it would unfairly shift the tax burden.

“Given the state's ongoing budget challenges, we appreciate Governor Malloy's efforts to keep towns whole in his proposed budget. However, eliminating the car tax will shift more of the burden onto the backs of homeowners, rental property owners and businesses or leave towns with massive holes in their budgets,” said COST President Dick Smith. 

"... add the proposed loss of over almost $700 million in car tax revenue, and homeowners, businesses and vital municipal services get shafted," said Jim Finley, Executive Director and CEO of CCM.

What do you think about the governor's proposal to eliminate the motor vehicle tax?