Will Latinos In CT Cities Save With New Car Tax?


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Graphic: CT House Democrats
Graphic: CT House Democrats

Bill Sarno

One of the most disliked taxes in Connecticut, the one levied on cars, will become less burdensome and somewhat less inequitable in 2016 and 2017, most notably in some communities with large Hispanic populations where many lower income residents now pay a lot more to own a car than those in more affluent areas do for the same model.
Topping the high tax list is Hartford, which has the state’s highest tax rate, 74.29 mills, and  the highest percentage of its population, about 50 percent, counted as Hispanic/Latino. In the capital city, a 2012 Toyota Highlander brings a nearly $1,400 a tax bill as compared to $551 in Easton, where the population is about 98 percent white, according to the figures distributed June 11 by the House Democrats.
As part of the recently approved state budget, the car tax will be capped at 32 mills in 2016 and 29.6 in 2017;  this change will drop the tax on the 2012 Highlander to $541  in both Hartford and Easton.  But there will be significant disparities between many cities and the more affluent communities where the real estate values are higher and the tax rate is lower, such as Farmington, Greenwich or Avon.
The House Democrats, who played a major role in pushing through the controversial two-year state budget, the owner of a 2012 Honda Accord, who now pays $778.80 in Hartford will shell out $335 in 2016 and $308 the following year.
The savings are even higher for newer, more expensive cars. The owner of a 2015 Accord, where the current bill in the capital city drops from the current bill $1,234 and is projected to drop $702 next year and $746 in 2017.
In New Britain, where the tax rate is 49 mills and the population was about 38 percent Hispanic/Latino in 2010, the savings on the 2015 Accord is $282 in 2016 and $326 in 2017.
Large tax reductions are also in the works in cities such as Waterbury, Bridgeport and New Haven, which have large Hispanic populations. However, not every municipality with a significant Latino population fits into the Democrats calculations because their current tax rates are currently lower than 29.6 mills. These are primarly in Fairfield County: Stamford (27.35 mills), Danbury (27.60) and Norwalk (28.241).
In generating their figures, the House Democrats focused on six models: four standard sized-cars, the 2012 and 2015 Honda Accord and Chevy Malibu, and two larger vehicles, the 2012 Toyota Highlander and 2015 Dodge Malibu. They used the standard Kelly Blue Book values in their tabulations and the 2015 local tax rates, which were applied at 70 percent to produce assessed values, or the amount on which the tax is applied. The assessed values are kept stable for the three-year period.
The lowest assessed value amount the Democrats used in their examples is for the 2012 Chevy Malibu, $9,457, and the highest is for the three-year old Highlander, $18,439.  The taxes for the 2012 Honda Accord are based on an assessed value of $16,615.
Other cities were the House Democrats anticipate large savings include Waterbury, where the mill rate is now 58.22 and the population is about one-third Hispanic/Latino. There, the tax on the 2012 Accord drops by $274 in 2016 and $302 in 2017; for the 2015 Accord the savings are $435 and $479.
In New Haven, where the tax rate is 41.55  and the population is more than 27 percent Hispanic/Latino, the savings on a 2012 Accord are $100 in 2016 and $128 in 2017 and for the 2015 Accord the respective savings are $159 and $203.
In Bridgeport, where the mill rate is 42.1 and the Hispanic/Latino population exceeds 38 percent, the savings on the 2012 Accord is $106 and $134; for the 2015 Accord, respectively the savings are $169 and $213.
Taxpayers in many of the suburbs of the larger cities also are expected to benefit to varying degrees from the car tax cap, particularly in 2017 on a newer car such as the 2015 Accord. In Wethersfield the savings be $123; West Hartford, $133; Trumbull, $47;  Woodbridge, $93, and Newington, $90.
In towns, where the tax rate is below 32 mills in 2015 but above 29.36, the cap would not apply until 2017, when the savings on the 2012 Accord was projected, for example, at $30.24 in Cromwell, $8.14 in Burlington and $34 in Plainville.
In addition to the car tax, the levy on real estate is also likely to change in future years, especially as towns receive a portion of the state sales tax to cushion the revenue loss from the car tax reduction.
The exact impact on taxes will depend on what a city does with the extra state cash,  said Sen. John Fonfara, a Hartford Democrat, recently. Fonfara is co-chairman of the legislature’s Finance Committee which crafted the new tax package.