Klaskin Reveals Political Courage - and Rhetoric (Part One)

One has to applaud Seth Klaskin for having the political courage to respond to blogger Janet’s challenging questions directed to the candidates for First Selectman.  Going on the record and making promises are dangerous actions for candidates who may then be expected to perform to their stated standards and principles if elected. 

The question thus becomes:  What promises were made and is it even possible to keep them?

To Janet’s question about how he would increase Madison’s revenues, particularly the tax base, Seth promised to effectively support economic development by:

1.  Filling our empty storefronts and office space.  Nice idea, but that would only net an average of about $360 in additional taxes per filled space.  Remember, towns in CT can only tax property, plant and equipment otherwise known as land, buildings and the equipment, furnishings and machines used to operate the business.  Building owners have to pay taxes on the land and buildings whether they are totally empty or fully leased.  So when a retail store or an office moves into a vacant space the entrepreneur pays rent to the owner and the Town only receives the taxes on the desks, chairs, computers, cash registers and other office equipment, shelves, display cases,  etc, which in Madison have an average assessed value under $18,000 per business and which pay taxes to Madison averaging about $360. 

The point of that rather long explanation is that the tax base is only increased noticeably when a new building is built, preferably on land previously held under Public Act 490 that had tax payments of only pennies on the dollars.  Examples of expanding the tax base here in Madison are the new Madison Beach Hotel which increased the taxable (assessed) value of that property by more than $6 million.  Other examples include the recently remodeled and expanded office buildings on Wall Street.   

It should be noted however, that some kinds of new building increase costs to the Town in excess of the additional tax money raised.  Examples include large homes designed for families with school age children.  Services provided by the town to the people occupying those homes, include education (70% of Madison’s annual budget), a plethora of recreation, and Youth and Family Services.  That kind of net tax negative  development has to be balanced with complementary development that requires few services from the town, such as homes for empty nesters and seniors, and the aforementioned Hotel and new offices. 

Smart development carefully balances the housing needs of all age groups as well as their needs for goods and services with a well designed tax base.  

2.  Seth also promised to work with his personal relationships in the state economic development groups. I wish him great success with this, but given that CT was dead last in the nation in economic growth in 2012, and the only state with shrinking GDP, I don’t have a lot of faith that much will come our way from Hartford.  

My hopes were raised for expanding the tax base when Seth wrote that he would aggressively target new businesses that would benefit from Madison’s location – “target” being a key concept here.  But before he can persuade a new business to come to Madison, won’t he have to overcome the well honed barriers to new business development that have increased exponentially here in Madison. 

Here’s an example: The primary problem facing economic development in Madison is that residents are believed to not want economic development, and indeed are encouraged to be anti-development.  So much so that in 2012  the Town formed another committee, The Committee for Land Acquisition Strategy whose purpose is to identify and  buy land as its members become aware of it and before it comes to market  -- in direct competition with builders and entrepreneurs who might like to actually build and develop something that increases the tax base.  

So, here are a couple of new questions for Seth.  Are you aware of this Committee for Land Acquisition Strategy and its activities which are conducted in secret (so a developer or entrepreneur can’t learn about the availability of land on which to build)?  Do you know how it is funded? Are you aware that “proposed transactions should be brought to the BOS and they will be responsible for funding.”? Does that mean that Madison’s taxpayers are funding the prevention of economic development?  How will this barrier Committee impact your stated intent to aggressively and proactively attract new businesses to Madison.?

I wonder if it became the law (or policy) that our annual budget could increase only by an amount of new revenue equal to the sum of the expansion of the tax base, interest on town investments, sale or lease of Town owned property such as Academy School, fees charged for services etc. (with exceptions for emergencies) – would Madison’s residents then put their collective minds together to identify appropriate net tax positive businesses for the Town of Madison?  What say you, Seth?