Bill Sarno CTLatinoNews.com
For the thousands of Hispanics who own cars and live in Connecticut’s largest cities, a bill, known as SB-1, that contains a provision that would essentially cap the property tax assessed on personal vehicles could be a significant game changer, especially in Hartford which has the highest car tax in the state.
“SB-1 is very Hartford friendly,” said Rep. Edwin Vargas (D-6), whose south-central Hartford district is more than 50 percent Hispanic. The Hartford Democrat added that he is very excited by the bill, which includes other provisions that would benefit the capital city, and hopes its survives the legislative process in close to its present form.
As it now stands, Senate Bill No. 1, which was recently approved by the General Assembly’s Finance, Revenue and Bonding Committee, would save some Latino families and their neighbors as much as several hundred dollars a year. The car tax would be capped at 29.36 mills, a rate much lower than heavily Hispanic cities such as Hartford and Waterbury now impose.
Noting that the property tax rate in Hartford, where Latinos now comprise about half the population, is the highest in the state, 74.29 mills, state Sen. John Fonfara, a Hartford Democrat whose district also includes Wethersfield, said the car-tax cap would provide a major savings to his constituents who are now “paying through the nose,” especially if they own a newer model car.
Currently, a car assessed at $20,000 in Hartford would cost the owner nearly $1,500 in property taxes as compared to less than $600 if the SB-1 formula is applied.
Similiar scenarios play out in other city with large Latino populations. The tax on a 2013 Honda Accord with a market value of $18,000 and assessed at 70 percent would be capped at $370, according the Senate President Martin Looney of New Haven. This figure was compared to $734 in Waterbury, $617 in New Britain and $532 in Bridgeport.
Moreover, the impact of the real estate tax, which impacts the cost of living and owning a home in many of the communities where the state’s Hispanic population is concentrated, could be reduced by other tax changes. These revisions include allocating a share of sales tax revenues directly to the municipalities and state-mandated
tax exempt property.
About 50 percent of the property in Hartford is now tax exempt, said Fonfara, who is the Senate chair of the finance committee. How much home owners could save depends on what each city decides to do with the money it would receive, he said.
Another SB-1 supporter is Rep. Jason Rojas (D-9) who represents parts of Manchester and East Hartford, a district
that is only about 6 percent Hispanic. He voted with the Democratic majority in favor of this bill when it was approved by the finance committee.”SB-1 does not completely address the disparities in our property tax system but its a critical and long overdue step in the right direction.”
Advocates of SB-1 unfairness of the current charge that this tax and revenue package would alleviate some of the unfairness evident in the current setup. “A 2015 Honda Accord in East Hartford is no different than a Honda Accord owned in Hartford,” Rojas said, adding “but because of disparity in towns fiscal health an owner would pay disproportionately more in property taxes in Hartford.”
Looney points out that taxpayers in Hartford pay more than six times the car tax as a Greenwich resident for the identical car. “This is wrong,” said the Democratic leader whose district includes New Haven, North Haven and Hamden and it about 20 percent Hispanic.
As an example of the disparity, a car assessed at $20,000 brings a tax bill of $1,486 in Hartford and $522 in Danbury as compared to $219 in Greenwich, according to the Wall Street Journal. Another taxing issue is that some residents in high tax-rate cities, register their vehicles elsewhere thereby benefiting places where they do reside, said Vargas. Some people have registering their cars in Maine which does not have a property tax on vehicles, Fonfara said, adding that he did know how much revenue this takes away from Hartford.
In going door-to-door in voter registration drives, Vargas said he also has found people who admit, off the record, that they will not sign up to vote in Hartford because they cannot afford the city’s property tax.
Eliminating or reforming the property tax on cars has been advocated by Gov. Dannel Malloy and various legislators as needed to help families and small businesses. However, change has been vociferously proposed by towns who rely on this revenue.
Three years ago when Governor Malloy tried to eliminate the property tax on vehicles in its entirety, there was a parade of mayors and first selectmen coming to the Capitol to fight and ultimately help defeat this proposal.
This time, said Fonfara, there is a “different conversation” with municipal officials expressing concern that the state would give them the money one year to compensate for lost car tax revenues and would take it away the next.
Fonfara said the fate of SB-1’s property tax change is uncertain as the legislature looks at the tax package connected with the budget deliberations. The importance thing about this bill, Fonfara said, is that it would “break the back” of the dependence on the property tax.