Rosenthal Labels Governor’s Tax Cap Plan A Sound Byte Initiative

By John Voket

As far as Selectman Herb Rosenthal is concerned, the governor’s renewed pitch to limit property taxes in relation to cost of living increases provides a perfect sound byte for any state lawmaker who wants to get reelected. But the former first selectman and past president of the Connecticut Conference of Municipalities (CCM) believes any attempt to implement the program in its current incarnation will come back to bite taxpayers where it hurts, by forcing municipalities to flat-line or scale back services.

Now serving the on CCM’s Board of Directors, Mr Rosenthal said current discussions on the proposal appear to be incomplete. While there appears to be plenty of crafted rhetoric in its defense coming out of the governor’s office, the line goes dead when critics try and define how the state will make up for millions in services that could go unfunded if towns cannot levy property taxes to pay the bills.

“We all know property taxes are an unfair way to pay for government services,” Mr Rosenthal told The Bee following the latest round of reports from Hartford on the plan. “In Newtown’s case I believe we are already planning to get back less in state money than we sent to Hartford in taxes this year.

“If the state gives back less than we pay in as taxpayers, and then tries to cap our only revenue source, how can we provide the services taxpayers demand, or that the state and federal government mandates, especially in the area of education?” he asked.

As recently as Wednesday, Governor M. Jodi Rell and lobbyists for municipal governments at the state Capitol were sparring over her plan to limit local property tax. Despite increasing criticism from municipal leaders and some key Democratic lawmakers, Gov Rell said she will revive that idea rejected six months ago by the Democratic-controlled legislature.

Christopher Cooper, a spokesman for the Republican governor, said she will be flexible on aspects of the plan. The final proposal will not be unveiled until after the state’s Property Tax Cap Commission completes its report in January, he said.

Exceptions And Flexibility

Under the draft plan outlined by the governor March 28, municipal property tax increases would be limited to no more than three percent a year, beginning with city and town budgets that start July 1, 2008. The limit also applies to special taxing districts such as fire districts. There will be four exceptions to the limit:

Grand List Growth — Town grand lists typically grow by 1.5 percent to 1.9 percent per year without special situations such as the development of a new subdivision, shopping mall, or industrial site. Any growth in a municipality’s grand list over 1.5 percent — other than motor vehicles — may be added to the property tax increase for that year.

Debt Service — Expenses related to paying for capital projects are exempt from the limit, but only for the life of the bonds.

Override — The limit may be exceeded on a vote of two-thirds of the municipality’s legislative body and a simple majority vote of residents.

Emergencies — The limit may be exceeded in the event of a natural disaster, fire, or other emergency.

Mr Rosenthal said any flexibility he has heard about including waiving municipal debt service and emergency expenditures relegates the overall proposal to an artificial maneuver in his eyes.

“That kind of flexibility does little more than encourage municipalities to pay for things by borrowing money,” he said. The Connecticut Conference of Municipalities as an organization said Gov Rell’s plan is “wrong for Connecticut” and calls it a “cure worse than the disease.”

“A cap is simply not appropriate in Connecticut — local residents have ample ability to decide the sizes of their local budgets — a state-imposed cap would be the ultimate ‘nanny-state’ act; it would tell local taxpayers that the state knows better than they how much their town should tax and spend,” the municipal group said in its cover for an eight-page report filed December 20. “It would tell local taxpayers that the state knows better than they how much their town should tax and spend.”

Mr Cooper said the Connecticut Conference of Municipalities represents local government, not taxpayers.

“The mayors want simple cash payouts that they can spend,” he said. “The governor wants the cash in taxpayers’ wallets.”

Towns Oppose Caps

Gian-Carl Casa, a chief lobbyist for the CCM at the state Capitol, said the membership of the organization overwhelmingly opposes the caps on taxes. The group represents 144 of Connecticut’s 169 cities and towns.

As Newtown’s first selectman for a decade, Mr Rosenthal said he always tried to be careful about spending, but school mandates, energy costs, health insurance, and union contract settlements have all generally exceeded three percent in recent years.

“Some of our biggest drivers have gone to nearly double-digits,” he said, adding that without authentic educational cost reform, the tax cap plan “could be crippling to many municipalities.

“This is not the kind of real property tax relief I think Connecticut taxpayers are talking about wanting to see,” Mr Rosenthal said. But defended in quick sound bytes, he said the proposal can insulate lawmakers from direct political fallout if the plan is put in place.

“It sounds good, freeze property taxes at three percent,” Mr Rosenthal said. “But I think there are as many taxpayers who will say they still want the same level of local and state services, or more. And if those services are costing six percent more to provide and the state says, ‘hey, you can only collect three percent,’ something has got to give.”