NEW CANAAN, Conn. – New Canaan would stand to lose about $2 million in tax revenue under Gov. Dannel Malloy’s proposal to eliminate motor vehicle property taxes, according to Town Assessor Sebastian Caldarella.
Malloy unveiled a proposal Wednesday to eliminate property taxes for cars valued at less than $28,500. The move is seen as a way to assist lower and moderate income families. Caldarella, however, said the proposed tax cut would be problematic for New Canaan and other small towns.
The cut, he said, would have no effect on the state budget, but would “hurt all municipalities in the state and force them to make up that loss in other ways.”
The cut could hurt middle-class and elderly residents and increase other real estate taxes, which could be passed on to renters and commercial tenants, Caldarella said.
New Canaan would save only about $30,000 in not having to collect car tax dollars but would still need to collect for cars worth more than $28,500, personal property taxes and real estate taxes, he said.
He also suggested Malloy could help better by cutting state income taxes or reimbursing the towns and cities from the car tax losses.