Legislature Passes Tax Relief For City, But Mayor's Comments Stung

May 4, 2006
By JEFFREY B. COHEN, Courant Staff Writer

With the clock running down on the legislative session late Wednesday, both chambers of the General Assembly approved a tax plan designed to allow officials in Hartford to ease the sting of increasing property values on homeowners in the city. The measure was approved 110-35 in the House and later by the Senate.

But even as lawmakers were putting the final touches on the bill Wednesday evening, it remained unclear whether Mayor Eddie A. Perez's dire threats last week helped - or hurt - the efforts to broker a compromise between city officials and the business community and get the legislation passed.

As talks were underway last week, Perez put out a release threatening to lay off teachers and police officers should the General Assembly fail to act before Wednesday's deadline, ruffling feathers at the Capitol. Several lawmakers said the move made the process more difficult.

"There will be some legislators who will vote against any plan as a result of the news stories," said state Rep. Art Feltman, D-Hartford. But he said the mayor's role had no "measurable effect" on the final compromise lawmakers were trying to pass.

State Rep. Cameron Staples, D-New Haven, co-chairman of the legislature's tax writing committee, said that Perez's "comments did not help," and credited the Hartford delegation with keeping the process moving, "despite the negative feelings generated by the mayor's comments."

The plan will allow the city to phase in the effects of a citywide revaluation of property.

Because residential property values have climbed much more quickly than commercial values, the new numbers meant that with no changes in the law, homeowners would bear a significantly larger share of the tax burden than they currently do - driving up taxes for some homeowners by more than 100 percent.

Perez and the Hartford delegation have been working to find a way to ease the pain on the residential property owners, while also eliminating the pre-existing 15 percent surtax on commercial property the business community has been trying to get rid of.

The business community sharply opposed any plan that simply put off the effects of revaluation for another several years. In 2004, the state passed legislation allowing Hartford and other municipalities to delay implementing revaluation until 2007.

The measure approved Wednesday would allow the city to proceed with revaluation, but phase in the stinging effect on residential property owners by capping the average annual tax increase linked to the revaluation to 3.5 percent over the next five years.

At the same time, the law phases out half of the 15 percent commercial surtax over the same period.

As a result, residential property owners as a class would pay 18.8 percent more in 2010 than they did in 2004, while commercial property owners would pay 6.5 percent less in 2010 than they did in 2004.

"I don't think that anybody sees this as solving the problem permanently," Staples said. "I think it's a five year fix, and then there will be further discussion."

The measure was sharply criticized by state Rep. Robert Heagney, R-Simsbury, who called it a "recipe for disaster."

He and other Republicans spoke at length of their concern that the new law would put Hartford on untenable fiscal ground in eventual need of a state bailout.

But Matt Hennessy, Perez's chief of staff, said the mayor believes the bill is "a workable solution until we come back and have another conversation about it."

He also said that the mayor's public comments last week were the sort of thing that needed to happen to help focus the legislature's attention.