The Coming Tax Grab

State Representative Gail Lavielle has a way of speaking plainly to her constituents on important issues that even a tax hungry legislator might appreciate.

In a letter to the editor of the Westport Daily Voice, Mrs. Lavielle acknowledges that most people in Connecticut think their property taxes are too high, and she then proceeds to lash “SB1, An Act Concerning Tax Fairness and Economic Development.” Just as House Bill 6815 since modified after scrutiny by Mrs. Lavielle, was a land grab, so SB1 is a tax grab.

“So just imagine how you would feel if a portion of your local property taxes were diverted to other towns, and then, at the same time, you had to pay even higher local taxes to maintain your town’s or city’s services. Unfortunately, this could happen if a bill now under consideration in the General Assembly passes during this legislative session.

“SB1, An Act Concerning Tax Fairness and Economic Development, has been raised by the legislature’s Planning and Development Committee. If it becomes law, it would create a new regional layer of taxing authority and bureaucracy in Connecticut. Connecticut residents expect to pay taxes to their state and federal governments and to see them used to fund activities, services and structures outside of their hometowns. Local property taxes, however, are different. While local property taxes are burdensome for many, residents have at least had the assurance that they would be used to pay for services in their own towns or cities. This bill, however, would create a new level of government that would absorb a portion of these local taxes and then allocate the funds to other cities or towns.”

“Tax fairness” is the flag progressives hoist over every attempt to make taxes more progressive, once they’ve increased them. Redistribution is the essence of progressivism, and in this instance property taxes are made more progressive when a state agency collects a portion of the tax and redistributes its take from more wealthy to less wealthy towns, hence the title of the bill, “… An Act Concerning Tax Fairness…”

When the “new regional layer of taxing authority and bureaucracy in Connecticut” appropriates a portion of town taxes levied in Town A in order to distribute the municipal taxes it collects to Town B, the new taxing authority in essence forces Town A to raise its property tax to maintain the municipality’s current level of services; at the same time, the taxing authority provides an opportunity for town B to reduce its taxes, an eventuality on a par with Earth colliding with Mars. The implication is that “tax fairness” requires a redistribution of resources from tax rich to tax poor municipalities.

There are two unacknowledged points that should be made: 1) The mill rates in cities, considered poor, are much higher than in the most gilded of gold coast towns. Property taxes are determined by multiplying the assessed value of the property by the mill rate -- $1.00 of tax for each $1,000 of assessment – and dividing the total by 1,000. The mill rate in Greenwich is 10.969, while the mill rate in Hartford is 74.29, many times greater. Our Capitol city, to choose one of the Big 3 urban centers in Connecticut is not tax poor. Were the city tax poor, it would not have spent millions of dollars luring a baseball team from New Britain to Hartford.  2) A redistribution, if such is necessary, can be accomplished on the distribution end of the present system. The state in fact does distribute more tax money to poorer rather than richer municipalities, much of it being spent on public school employee salaries; so that any additional redistribution mechanism would seem to be redundant. If the state of Connecticut wishes to distribute more in state aid to Hartford than Greenwich, it does not need SB1 to do it.

SB1 is a tax grab promoted by tax hungry progressive politicians in the General Assembly, the hungriest, foxiest and most duplicitous of whom is President Pro Tem of the State Senate Martin Looney of New Haven, one of Connecticut’s Big 3 urban centers.

At some point, the big spenders may – or may not – meet their match in Governor Dannel Malloy who, after levying upon his state the largest tax increase in its history, now seems to be impatient with talk of further revenue enhancements. The budget sent by Mr. Malloy to the General Assembly, dominated by members of his party, does include additional revenue enhancements of some $800 million, which is nearly a billion more than his campaign promises had suggested he would be willing to impose on his already overburdened state. During both his first and his second gubernatorial campaign, Mr. Malloy gave everyone to understand that his first tax bump would set the parameters of future budgets; henceforward, the state was to live within its means. His parameters were to be taken seriously.

So far, Mr. Malloy has not said he would veto any future revenue enhancements. The promise of a veto – like the possibility of execution in the morning – would wonderfully clear the minds of tax starved Democrats in the General Assembly and permit the body to concentrate on spending cuts.