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Taxes Too Onerous To Bear

June 1, 2007
Column By RICK GREEN

Here's what you get in a tiny state of extreme wealth and poverty, where the ceaseless debate about fairness and taxation goes nowhere.

A successful business that employs 39 people and actually manufactures a product in Hartford's Frog Hollow neighborhood says that its property taxes will rise by 200 percent. Dozens of other small businesses in Hartford are also facing crippling tax bills.

I'm all for going after Hartford's dysfunctional government, the $511 million budget, the poverty and failing schools. But the real villain is the property tax and a lack of any regional approach to government.

We have all these municipalities setting their own tax rates, duplicating services and, in the end, we are driving business away. Property taxes are three times as high in the cities as in our affluent suburbs.

After all the phony drama in the legislature and governor's office this year about taxes, there's no real change. How many municipal crises - from the inadequate funding of education to driving business out - will we have before our leaders muster the courage to enact real property tax reform?

For 40 years, Thomas W. Raftery Inc. has been making bedspreads and draperies in the city. Its Broad Street building, between Park Street and Trinity College, is in a neighborhood essential to Hartford's revival. Half of the employees are Hartford residents.

But after surviving gang violence in the 1990s, competition from rivals with dramatically lower labor and tax costs, and watching other businesses flee Hartford, Raftery now faces a new enemy.

One day in February, CEO Gary Rigoletti opened a letter from the city of Hartford. Because of a long-delayed "revaluation" of the grand list of taxable property, the assessed value of his business property was tripling, city bureaucrats told him, from $264,300 to $797,100. He calculated that meant a tax increase of nearly $30,000.

Earlier this week, Hartford approved a new city budget, financed by the newly updated grand list. The grand list was revalued in 2006 for the first time in seven years. Real estate values went through the roof.

"We understand that we have to pay taxes and we have to participate," Rigoletti told me after we walked through his company's small factory, where flags representing the ancestry of employees - Albania, Peru, Poland - hang above sewing machines and rolls of fabric.

"But people have to do the math here. The math adds up to disaster."

It's not like some folks aren't taken care of.

The developer who will break ground this fall for the Front Street entertainment district will get nearly $30 million in state and city grants and loans, plus a tax abatement worth $12 million. The owners of high-rise office and apartment buildings will see a cut in property taxes under the new grand list.

Hartford now wants the legislature to grant it a delay in state-mandated revaluation to try to figure out what to do. Large businesses don't want the solution to include preserving a tax slated for elimination, a 15 percent surcharge on commercial property. Political leaders also don't want to stick it to Hartford homeowners, whose taxes are capped.

But as everyone talks about another short-term fix, Rigoletti wonders how his business will survive.

"Who is going to come here?" Rigoletti asked.

A better question is, who is leaving?