“Revolutionary” State Budget? Property Tax Relief, New ED Aid For NB Is Part of Democratic Package

by John McNamara

A tentative agreement among Democratic leaders on a biennial state budget  that begins July 1st appears to be good news for New Britain and other municipalities in terms of property tax relief and continued aid to the under-funded city schools.

Late Saturday (May 31) Democratic legislative leaders and representatives of the Malloy Administration agreed on a revenue package that will drastically cut the car tax. The measure will set aside the city’s property tax rate of 49 mills on vehicles and cap the tax for cars to no more than 29 mills in a statewide formula.   The levy on vehicles will be in effect for the 2015 tax year if OK’d in a final vote. At the same time the plan will designate a percentage of sales tax revenue for transportation and new funding to cities and towns to reduce burdens on property taxes.

The Democratic package, if approved by the Legislature, represents the most significant change in Connecticut’s tax structure in decades, making the system more progressive and fairer to New Britain and other cities.

Taxes will most certainly  increase by a smidgen for high-income individuals with the ability to pay. For most citizens burdened by one of the nation’s heaviest property tax burdens there is relief.  State Senate President Martin Looney (D-New Haven) called the proposal “revolutionary” and said “this budget meets the state’s obligations and provides historic property tax relief for the people of Connecticut,”  It includes provisions to:

–  Raise the income tax rate on millionaires from 6.7 to 6.99 percent

–  Maintain the state sales tax at 6.35 percent and designating half a percent each to local property tax relief and the Malloy transportation initiative. Proposed sales taxes on accounting, engineering, advertising and dry cleaning were eliminated from the plan.

– Triple the tax on computer and data processing from 1 to 3 percent.

– Adjust Payment In Lieu of Taxes (PILOT) grants to municipalities with high mill rates where state property and nonprofit institutions hold significant amounts of property.

As the legislative session ends New Britain’s legislators have been mobilizing to retain a fair share of municipal aid,  support state-funded programs and maintain New Britain’s share of education funding.

Details will be forthcoming over the next several days, but it is likely that the delegation has succeeded and the city will improve on the $85 million (covering 68%)  it now gets under state cost sharing formula to underwrite the education budget proposed by the Stewart administration at a flat-funded $124,183,673.

Despite billion dollar deficits confronting the Malloy administration and legislators in  state budgets since 2011, New Britain’s education aid has steadily increased over the last four years.  It will do so again if the budget package wins approval by Wednesday, June 3.

To be sure New Britain schools will remain under-funded in comparison to comparable communities in the absence of more equity in the way educational funding is distributed. The state budget package now on the table, however,  is a step in the right direction.  New Britain has fallen behind more sharply than others because of a consistent pattern of the city setting budget priorities that stiffed the schools year after year, but increased spending in municipal government. This year is no exception.

Attention now turns to the adoption of the municipal budget. The Common Council is due to act on  the Stewart Administration’s $224,757,851 budget and 49 mill tax rate by mid-June.  No matter how the city acts there is now room for optimism on property tax relief and education aid given the prospect of a “revolutionary” state budget plan being adopted.