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Time Is Now For Property Tax Reform

By OZ GRIEBEL

February 25, 2008

For over 30 years, the City of Hartford has labored under a tax system that differs significantly from all other Connecticut towns due in part to the city’s large amount of tax-exempt properties, its low percentage of residential homeowners, and the fiscal impact of repeated delays in revaluation.

While intended to provide greater equity in generating the city’s tax revenues, the system has had the reverse effect by retarding grand list growth and discouraging the establishment of small businesses and private sector investment.

Given this history, we applaud the hard work and recommendations of Hartford’s Property Tax Reform Task Force appointed this past August by Mayor Eddie Perez and the Hartford City Council.

The 11-member task force invested hundreds of hours over five months to listen to taxpayers, to evaluate ideas and best practices, and to establish a set of comprehensive recommendations that will align Hartford’s property tax system more directly with those of all other cities and towns.

While the implementation of several of the recommendations will require legislative authorization, the total package differs dramatically from prior requests for state relief in that it propels Hartford towards the mainstream rather than seeking more special exemptions.

Today, Hartford is currently the only city in Connecticut that does not assess all property at 70 percent of fair market value, and it is also the only city that penalizes businesses with a surcharge on top of their regular tax bill, a combination that incents businesses to expand or relocate elsewhere.

REVERSING BURDEN

The recommendations of the task force take important steps in reversing this trend.

With respect to the 15 percent surcharge, Hartford’s commercial property owners have paid it willingly since 1990 with the expectation that it would make homeownership in the City more affordable by artificially suppressing the tax implications of revaluation on residential taxpayers, thereby increasing homeownership and population.

Instead, homeownership has remained flat at best and population has decreased by over 22,000 people. This policy has not met its goals.

In addition to the assessment and surcharge recommendations, the task force also notes the need for the city to adopt specific practices to enhance taxpayer confidence in the city’s budgeting and taxing methodology through greater transparency, more frequent revaluations and the addition of staff in audit and other fiscal review functions.

These recommendations will also strengthen the annual appeal by the Hartford delegation to the governor and the legislature for assistance, such as increasing the state reimbursement for nontaxable PILOT properties.

The recommendations can demonstrate to the legislature and the governor that the city is at the table, engaged in a joint effort to make changes on the local level that complement assistance on the state level with the ultimate goal of making Hartford’s tax system consistent with every other city and town in the state.

For all of these reasons, we endorse the task force recommendations as a major and constructive reform to strengthen Hartford as an attractive option for both residential and business investment.

We look forward to working with the mayor, the city council, the legislature, and all interested parties to ensure that the city continues its growth as the dynamic urban core of the Hartford Region.