New Canaan Would Lose $2 Million In Malloy Car Tax Cut

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New Canaan may lose up to $2 million in property taxes under Gov. Dannel Malloy's budget proposal.
New Canaan may lose up to $2 million in property taxes under Gov. Dannel Malloy's budget proposal. Photo Credit: Melvin Mason

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.

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It is a curious tax that is established by the state but collected and retained by the towns. This move sounds like a cynical political move by Malloy, who will take the credit for "tax relief" and pass the problem along to the towns who then must replace the revenue or find economies, economy not being in the lexicon of this devious governor. Note that he is also adjusting the sales taxes which he and the legislature imposed 2 years ago, because of the considerable outcry against them as they are harshly regressive against the less affluent. So it looks like Malloy is positioning himself for reelection in the usual way that some politicians do. Sadly, Lincoln was correct in that "you can fool some of the people all of the time", and enough to add up to a slim majority these days. I just read that Connecticut's new budget may come in at a deficit of about $1 billion,similiar to New York's, giving us a per capita debt 5 times theirs. And NY is not in great shape. Malloy's gimmicks to attract favored businesses with targeted tax deals while leaving the essential structures in place has not had any great effect on our economy. He also did not deal with the bloated union-dominated state government megastructure (look it up!). But for Wall St. wealth flowing into lower Fairfild County we would be broke, and that pump will not produce forever what it once did. If there are big defense cuts what will happen to thye few bright manufacturing companies we have? Will our 100% Democratic congressional delegation "bring home the bacon" therby bucking their party? Need to keep an eye on them.

So this article is just about MV taxes, but the big picture is not to be ignored either.