The Conveyance Tax Proposal

To the Editor:

As we enter the debate that is sure to develop over the next several weeks about the conveyance tax question on our November ballot, let’s make sure that we, the voters, understand the nature of the question being asked, as well as the workings of the conveyance tax itself. The underlying question is simply: would we, the taxpayers of the Town of Newtown, support an increase in our municipal conveyance tax in order to fund the acquisition, improvement, and maintenance of public lands/open space?

Since the municipal conveyance tax is currently a matter of state law, to effect any change regarding that tax, we must approach the state lawmakers. So, a Yes vote will indicate your support for the municipal conveyance tax funding strategy and respectfully ask the town officials to pursue the matter with the state. A Yes vote will not, cannot, increase the tax rate. Any increase would have to be approved by our town, at a later date and only if the state does, in fact, give us permission to do so. On the other hand, if you would not support an increase in the municipal conveyance tax in order to fund the acquisition, improvement, and maintenance of public lands/open space, even if the state allowed it, you should vote No.

What is the municipal conveyance tax? It is a state mandated “transfer” tax, levied on real estate transactions, that is kept by the municipality in which the “transferred” real estate is located. Currently, the Town of Newtown gets one quarter of one percent ($2.50 per thousand dollars) of the “sale price” of the real estate transaction. If completely successful and approved to the maximum by our town, Newtown would get $15 per thousand dollars and those funds would be designated strictly for the acquisition, improvement, and maintenance of public lands/open space here in Newtown. The State of Connecticut takes one half of one percent ($5 per thousand dollars) as its conveyance tax. The tax is paid at the closing of a real estate transaction, so it really does not matter who you think actually “pays” it. If you are not involved in a real estate transaction you will not pay the tax.

So, Newtown, let’s talk about it. Are we serious enough about the acquisition, improvement, and maintenance of public land/open space to think beyond the traditional, across-the-board, property tax in an attempt to find alternative funding sources?

David E. Brown

3rd District, Legislative Council

246 Hattertown Road, Newtown                         September 14, 2004