Although House Speaker Jim Amann said it’s just about off the table, the idea of a property tax cap is very much in play from Governor Rell’s side of the budget. From Brian Lockhart at the Advocate:
With the legislative session scheduled to end June 6, Genuario has been huddling with Democratic leaders and the Republican minority to reach a consensus on the budget. He said Rell has insisted the tax cap be part of the package, but Democrats have yet to warm to the idea.
The majority party has proposed its own tax relief in the form of an income tax hike on households with $250,000 or more in annual income. Democratic leaders say this will allow them to reduce income taxes for everyone else.
“Let’s just say we’re far apart on tax policy - both their proposals and our proposals,” Genuario said. “But sometimes you start out far apart.”
The irony, according to Lockhart, is that the proposla to cap property taxes orginated with Democrats.
But it was a Democrat-led study that first encouraged legislators four years ago to consider limiting increases in local spending to hold the line on taxes.
In 2002, the General Assembly appointed a 17-member bipartisan blue-ribbon commission, led by New Haven Mayor John DeStefano Jr., to study the state’s over-reliance on the property tax.
DeStefano was Rell’s opponent in last fall’s gubernatorial race. Lower Fairfield County was represented on the commission by former Norwalk Mayor Alex Knopp, a Democrat; former Darien First Selectman Robert Harrel, a Republican; and Stamford Land Use Bureau Chief Robin Stein.
During a recent presentation of Rell’s tax cap proposal to the legislature’s Finance Committee, state budget director Robert Genuario said the initiative had been suggested by DeStefano’s panel in its 2003 report.
“I wanted to point out that this was not the first time this concept had been discussed, and the ground had been ’tilled a little bit,’ ” said Genuario, a former state senator from Norwalk. “I wanted to point out it’s not a Democratic or Republican issue. It shouldn’t be a partisan issue.”
But the commission only backed a spending cap if many related statewide property tax and municipal budget reforms were enacted, DeStefano said in a recent interview.
Don Pesci wrote recently on the subject:
Florida is not known for its chocolates, but it has become a haven for the tired, wretched and increasingly poor Nutmeggers who like its Homestead Act.
The Homestead Act is a bar to the kinds of increases in Connecticut property taxes that now threaten to impoverish all classes in the state but the very wealthy, whose fixed incomes are generous. They may not be so for long; our ever voracious legislature has been diddling for some time with a millionaire’s tax. Most recently, Democrats in the legislature have settled upon a more progressive tax that will kick in when earnings reach the $200,000 level, perhaps reasoning that a 1/5th millionaire is better than no millionaire at all.
If you bought a house in Naples in 1960 and paid X percent in taxes on it, the X percent will remain pretty much the same as you get on in years and your earning potential decreases.
Naples and Vero Beach are boomtowns largely because of the Homestead Act.
Not only does the Florida property tax homestead exemption reduce the value of a home for assessment of property taxes by $25,000, it also caps the rate at which property taxes may be increased. If a house is homesteaded, its assessed value remains fairly constant.
There is no revaluation shock on homes in Florida; this is the result of the “Save Our Homes†Amendment to the Florida Constitution which was passed by voters in 1992, and went into effect in 1995. The amendment caps the increase of the assessed value of a home with a homestead exemption to the lesser of 3% or the rate of inflation.
Connecticut will never become competitive with other states that attract companies and workers until we figure out that having 169 different versions of property taxes, school systems, and other important infrastructure only creates the high cost of living without contributing to more economic growth and lifestyle amenities. The only thing that makes fairfield county bearable is the proximity to New York City. The rest of the Connecticut is not so fortunate. But that proximity masks the reality that it is more expensive to live in the Stamford Norwalk area than it is to live in the heart of silicon valley. Is there anyone that can name one economic advantage that Stamford Norwalk can offer any startup technology firm? In the last 40 years? And thus Xerox recognized this even 40 years ago and located its innovative research lab in Palo Alto instead of anywhere in Connecticut.
source: Norwalk Advocate, “Pitfalls of capping property taxes“, May 29 2007
source: The Dangers Of Steady Habits: Why Florida Is A Boom Town And Connecticut A Wreck, By Don Pesci, May 23, 2007
