Proposal To Eliminate Car Tax "Bad Idea," Says Madison First Selectman

Already concerned about leaders of small towns from across Connecticut will be in Hartford today to testify against the governor's request to eliminate local car taxes.

In Madison, the estimated motor vehicle levy loss would be $2,810,485. The estimated supplemental motor vehicle levy loss would be $318,188 for a total of $3.12 million, according to the state's Office of Fiscal Analysis. In Guilford, the estimated loss would be $3.95 million, in Clinton $2.28 million and in Durham, $1.94 million. 

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 local officials complain that Malloy's proposal would put a serious dent in their budgets, costing some towns millions of dollars annually, revenue that will have to be made up by raising local taxes on other business property and real estate.

First Selectman Fillmore McPherson said Monday he agreed with the local officials who are planning to testify.

"It's a bad idea," McPherson said of the proposal.

"The money we'll lose will just have to come out of property taxes," he said. "I think it's all smoke and mirrors, this business about this being a tax break for the middle class. The money will have to come from somewhere else."

Property owners will end up paying more in local real estate taxes and people who rent will have to pay more rent to their landlord, McPherson predicted. The problem with that is that renters, who can now use car taxes as an itemized deduction on their income tax returns, will not be able to do so with that increase in rent. 

"It's just pandering to a class of people who think they're going to get a break, but they're not. It's just creating problems for the towns," McPherson said.

The proposal, which is being aired Monday in a hearing before the legislature's Finance, Revenue, and Bonding Committee.