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Moccia: Shut city down if car tax proposal passes

South Norwalk parking
Norwalk Mayor Moccia would like to give the boot to Gov. Dannel Malloy’s proposal to eliminate car taxes on vehicles worth less than $28,500.

NORWALK, Conn. – There’s no upside to the governor’s proposal to help the middle class by exempting some car taxes, as far as Norwalk’s mayor is concerned.

“If we don’t get the car tax we may as well shut the city down,” Mayor Richard Moccia said to a member of the Board of Education in an off-the-cuff moment Tuesday night, before the meeting began.

Gov. Dannel Malloy has proposed an exemption on the first $20,000 of a vehicle’s value if the vehicle is worth more than $28,500. Vehicles worth less than $28,500 would be exempt from taxes. He said last week that local tax collections need to be made more fair. Eliminating the tax would eliminate “much of the aggravation and paperwork” from local tax collections, he said.

“Most communities are fortunate if they collect 90 percent of car taxes,” he said. “Factoring in the cost of collecting and the number of tax delinquents, the car tax makes up a small portion of the tax base in most communities – between 2 and 10 percent.”

Finance Director Thomas Hamilton doesn’t agree.

“Norwalk’s current motor vehicle tax is approximately $17 million, or about 6 percent of the city’s total tax levy,” he said in an email. “… As I understand the proposal, we will be required to exempt the first $20,000 of assessed value (of a vehicle worth more than $28,500)  from each motor vehicle.  This suggests to me that the tax assessor will need to maintain a file with current values on all motor vehicles in order to determine if someone owns a vehicle with a market value in excess of $28,000, so they can be taxed on the amount above $28,000.  So, there will still  be considerable work involved in maintaining records on motor vehicles, and issuing tax bills for those who are still subject to the tax, but there will be almost no revenue coming to the city from this effort.”

The exemption would be optional this July, but mandatory in July 2014, if it’s approved by the legislature.

Moccia, though, is talking about it like it’s happening now.

“There are limits to what the city can do, budget wise. …,” he said, during Tuesday night’s meeting. “If he takes the car tax – that’s $11 million minimum. Eleven million. How do we make it up? No provisions to make that $11 million up.”

Hamilton said the number is probably closer to $15 million. The $11 million figure is from collections two or three years ago, he said. Last year’s collection was about $15.6 million.

Other taxes will certainly go up, he said. “If we lose the right to levy a tax a motor vehicles, we will need to make up that revenue loss by increasing the mill rate on real property and business personal property,” he said.

Moccia said that, when former Gov. Jodi Rell made a similar proposal, she planned to provide more state aid to give communities five years to transition into the exemption.

“If the car tax is eliminated it will create chaos in every community,” Moccia said. “How do you make up $11 million? Only one way. Everybody that owns a house and a small car is going to save $100 on his taxes, or her taxes, and wind up paying $700-$800 more in house taxes, and the businesses.”

Comments

19 responses to “Moccia: Shut city down if car tax proposal passes”

  1. jlightfield

    You can see why Norwalk struggles in so many ways. Hamilton says, “This suggests to me that the tax assessor will need to maintain a file with current values on all motor vehicles…” The concept of maintaining a file sounds so onerous, except that the file of car registrations is maintained by the DMV, a state agency. They in turn send a file of registrations to the towns in order for the towns to send out tax bills.

    Presumably, the “devil in the details” moment in this would be the push back to the state on sending only a list of cars registered in towns that can be taxed locally. Suddenly all the “considerable work involved in maintaining records on motor vehicles” goes away. Including the long and tedious process at the finance committee which has to approve all the appeals to taxes levied on phantom cars.

    Maintaining files, as in a database is not difficult to do or considerable. Millions of companies do it every day because they use technology to do the work. Something like code that applies a tax rate only to line items that meet thresholds. With 6 taxing districts, you would think Norwalk has figured out how to do that efficiently.

    Norwalk though, like some towns uses the car registrations for other things, like beach and transfer station passes. Perhaps rethinking how Norwalk wastes millions on “busy” work instead of providing services might close the gap on this revenue shift back to property that appreciates in value rather than property that depreciates in value.

  2. ScopeonNorwalk

    It seems to me that if Malloy thinks that it can be done, it can. He obviously knows more about running a city than Moccia and has had way more success in making a city thrive economically.

  3. Tim T

    ScopeonNorwalk
    You are so right
    How I read this is that Moccia feels is is not up to the task of finding a way around this.
    Maybe like cutting expenses.
    If he cant handle the job he should step down.

  4. Hi Jackie,

    One quibble: Norwalk uses car registration for beach passes, not car taxes. This proposal won’t affect beach passes as all as far as I can tell.

    I agree with the Governor that car taxes cost the economy more than they bring in in revenue. But the losers here will be older people in big homes with small older cars. If we phased out all car taxes on non-commercial vehicles, as Gov. Rell proposed, then the towns and the state would save a lot of labor costs, and it might actually work out for almost all taxpayers except the very wealthy.

    But Gov. Malloy never sees a civil servant that he thinks isn’t necessary.

  5. Tim T

    Norwalk also uses car taxes to illegally ban people from getting a beach pass.

  6. Tim T

    Jeffery
    You say
    But Gov. Malloy never sees a civil servant that he thinks isn’t necessary
    Its more like Moccia never sees a civil servant that should make under 6 figures.

    Maybe if Norwalk cut back on the insane salaries and insane police overtime like the private sector has they would find the needed saving.
    But what is Norwalk doing giving raises to department heads and the mayor…

  7. Bryan Meek

    Like Malloy’s new Uconn President who makes 500,000. That is more than Yale’s makes. Hello.

  8. jlightfield

    Hey Jeffrey,
    Not sure what you mean. The DMV supplies the list of car registrations to the City, In order to get a beach/garbage pass, the City checks to see if your car taxes have been paid. Same list no?

    Where a tax should be placed is on the car registration renewal. It’s been about the same cost per year forever. Have the state collect and send a % back to the municipality without a clawback by the State.

  9. jlightfield

    @Bryan Meek, Google is your friend:
    “Levin’s total compensation — his base salary, benefits and deferred compensation — amounted to just over $1.6 million during the 2010 calendar year, placing him second in the Ivy League behind Columbia President Lee Bollinger, who made more than $1.9 million, according to the two universities’ most recent tax filings.”

    http://yaledailynews.com/blog/2012/09/11/among-ivy-presidents-levin-earns-second-highest-compensation/

  10. Bryan Meek

    Deferred, means not now.

  11. jlightfield

    Okay Bryan Meek, Google is still your friend:
    “His base salary of more than $1 million, and total compensation of more than $1.6 million, made him the highest-paid Ivy League president and one of the highest in the country.”
    http://www.nytimes.com/2012/08/31/nyregion/yale-president-richard-levin-says-he-will-step-down.html

  12. Bryan Meek

    Thier form 990 shows 423k in deferred comp. Probably where I got that figure from, ignoring base salary.

    Back to the point of topic. Malloy isn’t exactly a saver if you haven’t caught on to that yet. I think eliminating the car taxes makes sense, but gaap to our governor is entirely different from gaap requires in dual entry accounting. Governor Blank Check is guaranteeing almost guaranteeing another credit downgrade.

  13. Tim T

    Bryan Meek
    You right wingers just don’t get it no one is buying that same old line “Blank Check” or tax and spend of the dems any longer. The fact is the dems cut taxes for the middle class and the Republican cut taxes for the rich and corporate America on the backs of the middle class.
    I think election day provided that your views are antiquated at best.

  14. Bryan Meek

    Tim. Inflation and lack of economic opportunity brought on by the current, wreckless policies in place is going to disproportionately hurt those on the bottom the most. You know the ones you pretend to care about.

  15. Mario B

    Moccia doesn’t know the right numbers when they’re right in front of him. This is about money in, money out. This may be a bit of side road to this but certainly food for thought; How many lawsuits are brought against the city every year? How many are settled out of court or outright lost by the city and the dollar amounts payed out by the city every year? If you could get answers to those questions (City Hall doesn’t want the public to know) you, my friends, would be floored.

  16. Original BARIN

    @ Mario,
    Is it made public, the cost of settlements? I would’nt think so, with confidentiality agreements in place.
    Curious.

  17. LWitherspoon

    @Barin and Mario
    I don’t believe any lawsuit can be settled without Common Council approval, which would entail revealing the amount of the settlement. Remember how the insurance company’s lawyer was trying to push the City into settling the mosque lawsuit? A Common Council vote would have been required to approve the funds for the settlement.

  18. Original BARIN

    Thank you.

  19. Peter I Berman

    Mayor Moccia’s comments make a case for convening a Financial Review Board of senior financial citizens who can provide effective oversight of a budget process well beyond the abilities of City officials. Doing more with fewer resources is standard practice in the real world, but Norwalk practices the reverse. Curtailing outlays and taxes ought to occupy the Mayor’s attention rather than criticizing the Governor’s proposals. That’s the task of our legislators.

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