Both Benefit Newtown—

Conveyance Tax Extension And Land Swap Legislation Approved

By John Voket

Local taxpayers will ultimately benefit from two conveyance-related initiatives that passed during the final days and hours of the 2005 state legislative session. While many actions approved in the final marathon will impact Newtown residents, businesses, and community projects, local officials were watching two particular bills very closely.

One bill amending a property conveyance and concerning the realignment of uses on three state-deeded parcels acquired by the town in recent years was passed late Monday. The other, concerning the repeal of a sunset clause on interim conveyance tax increases passed the State Senate in a two-to-one vote late Wednesday.

State Representative Julia Wasserman hand delivered copies of Amendment 7887 to House Bill 6909 to The Bee Tuesday morning, stating she was pleased the town could now proceed with plans to increase the number of viable commercial lots slated for a proposed tech park development off Commerce Road. In a recent interview she explained why the amendment would benefit environmental conservation and enhance a critical local economic development project.

“What we have is a [34.44-acre] parcel of open space conveyed to the town by the Department of Agriculture in 2003 for passive recreation and open space, and another [37.6-acre] parcel extending roughly from the Mile Hill railroad crossing past the Commerce Road treatment plant,” Rep Wasserman said. “That land was conveyed for commercial use several years ago.”

The proposal also factors in an additional 21.66-acre parcel deeded from the state to the town as part of the Fairfield Hills purchase last year.

Rep Wasserman said some of the land that was supposed to be used for open space is more suitable for development, and the amendment would simply allow the town to use the combined parcels in a way that would be most suitable while continuing to reserve about the same amount of land, 34.44 acres, for recreation and open space.

The action nearly doubles the depth of an open space buffer between planned commercial lots in the proposed tech park and Deep Brook, one of Connecticut’s last natural trout breeding areas.

In relation to the other legislative issue, Senator John McKinney contacted Legislative Council Chairman Will Rodgers around 5:30 pm Wednesday communicating his assurance that a sunsetting bill that more than doubled real estate conveyance taxes would be extended two more years.

Although he expected the commercial realignment amendment to pass without opposition, the latter news brought a sigh of relief from First Selectman Herb Rosenthal who faced the possibility of Newtown losing nearly half a million dollars from conveyance taxes already committed as revenue in next year’s municipal budget. He expressed confidence that Governor M. Jodi Rell would endorse both legislative items when they crossed her desk in the coming days.

“The land reconfiguration amendment was a no-brainer, really just a low-key administrative move,” he said. “[But] for a lot of small towns, it was a top priority to keep the municipality’s share of the conveyance tax.”

Mr Rosenthal said during a 2004 meeting between the governor and municipal officials, he felt reassured the conveyance initiative would receive Ms Rell’s approval if it passed legislative muster. But both he and Mr Rodgers confided that in recent weeks several top legislators were still supporting reducing the conveyance tax from its current level, to a rate that was supposed to only be temporarily increased two years ago.

“I know statewide the real estate industry was really putting on some pressure to sunset the legislation,” Mr Rosenthal said. “I know legislators made a promise to realtors, and the [conveyance tax increase] was only supposed to be in effect for a year. And they ended up already extending it again last year.”

In a 24-12 vote, however, the Senate agreed to extend the current tax for two more years. The conveyance tax of $2.50 on every $1,000 in transferred or sold property was originally increased from $1.10 on each $1,000 in 2003.

Saying he generally does not support tax increases, Mr Rodgers admitted that keeping the conveyance tax at its current level was, “probably one of the most harmless, and one of the more locally beneficial,” legislative actions.

Mr Rosenthal agreed.

“I know it wasn’t the outcome realtors were hoping for, but the state would loose $40–$50 million in revenue slated for towns and cities if they returned the tax to its original rate,” the first selectman said. “And given the current financial climate, and the increasing burden Newtown and other communities have with unfunded mandates, I don’t think lawmakers were prepared to do that.”

Mr Rosenthal explained that, at the current rate, the town’s share of the conveyance tax on a half-million-dollar home sale would be $700.

In opposing the legislation, State Senator Louis DeLuca of Woodbury suggested local communities should have made accommodations in their budgets because they knew of the chance the tax would be reduced back to its original level. He also commented that few taxpayers were familiar with the tax.

“Many people are not even aware of this tax until they sell their homes,” Sen DeLuca said.