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City Tax Plan Resolves Nothing

The City Council recently passed a resolution forming a task force to study Hartford's property tax mess and fix it. Small business leaders have already rejected the plan as a fraud.

By DANIEL D'AMBROSIO, Hartford Advocate Staff Writer

August 30, 2007

Even when they try to do right by Hartford's small business community, the City Council seems to get it wrong.

The council recently voted to form a task force to study and perhaps even fix the city's ongoing property tax fiasco, which in its most recent incarnation slammed small businesses with increases of up to 100 percent, while simultaneously protecting homeowners and big business from large increases.

In the case of big biz, taxes are actually going down, as the city is phasing out a 15 percent surcharge that has frequently been blamed for creating a bad business climate in Hartford.

The small business community, up in arms since spring when they realized the magnitude of the tax bills they were facing, has been calling for the task force to be formed, but what they got is nothing like what they wanted, according to Paul Mozzicato of the Hartford Small Business Alliance.

Not only that, says Mozzicato, but the resolution forming the task force was sneaked into the council's Aug. 13 meeting without putting it on the agenda, meaning small business leaders weren't there for the public hearing.

"I find it to be dirty," said Mozzicato of the City Council's failure to include the resolution on the agenda. "To me that is sleight of hand and back office stuff that shouldn't be happening. That's why we have no faith in City Hall."

City Council President John Bazzano denies any such sleight of hand. The formation of the task force has been talked about for months, Bazzano pointed out, and while the resolution wasn't on the City Council agenda that Monday night, he said it was only because it took longer than anyone expected to get it ready.

"We were trying to put the finishing touches to it and get the correct make-up of the task force," Bazzano said.

The resolution calls for the task force to be made up of three small business owners, one representative from the six largest taxpayers in the city, two city homeowners, one apartment renter, one member of the General Assembly from Hartford, one economist, one real estate professional and one "resident representative" from Hartford 2000.

All members of the task force, for which Perez is authorized to provide city staff support and up to $50,000, are to be appointed by the Mayor with the approval of the Council.

The resolution bears little resemblance to the one the Small Business Alliance tried to put before the city back in July, according to attorney Greg Piecuch of O'Connell, Flaherty & Attmore, who represents the Alliance.

"The resolution is a far cry from what my office drafted on behalf of the Alliance and submitted for consideration," said Piecuch. "On top of that what really tweaked my clients is that members of the group are going to be appointed by the mayor."

A look at the two competing resolutions reveals a great deal about how each side wants to frame the debate over the tax crisis, which has many small business owners saying they're going to have to shut down or leave the city, despite the City Council's "phase-in" of the tax increases over the next five years.

"Think of a firing squad," said Piecuch of the phase-in. "What's the difference if they go one at a time or all together? You're still going to be dead."

A comparison of the resolutions also reveals very different ideas of what it's going to take to get the job done — the Small Business Alliance proposed funding the task force with $250,000, five times the amount the city allows.

The Alliance's resolution begins by saying the 2006 revaluation was "conducted without full public scrutiny," and was "implemented without sufficient analysis of its effect on various classes of property owners." (Only small business owners took a giant tax hit in the revaluation. Homeowners were limited to 3 ½ percent increases yearly, while big business saw decreases of up to 6 ½ percent.)

The Small Business Alliance resolution also contends the impacts of the 2006 revaluation "were not adequately or timely disclosed to the public at large."

Compare that to the way the City Council's resolution sets the table, by saying the Mayor and the Council have been "strong advocates for comprehensive property tax reform" in the city and the state. Next the Council's resolution says the phase-in of taxes — dismissed by the Alliance as merely prolonging the pain — "has provided tax relief to all homeowners and businesses in the city."

With the city firmly on the hook for a job poorly done in the 2006 revaluation, the Alliance's resolution calls for a task force made up of nine members, as opposed to the 11 members the city designated.

More important, the Alliance gives the participating organizations: Hartford 2000 (a coalition of the city's 14 Neighborhood Revitalization Zone committees), the Chamber of Commerce, the Hartford legislative delegation and of course the Alliance itself, the right to select and appoint their own members — two from each group, except the legislature, which gets one seat. Perez is limited to appointing one member, and the eight initial appointees together select the ninth member of the task force.

"If the whole point is to get stakeholders to the table, you want to make sure the people at the table represent the stakeholders," said Piecuch.

While it's true all members of the task force are appointed by Perez in the resolution passed by the City Council, Bazzano points out an amendment to the resolution stipulates the Council has to ratify the appointments for them to stand. And he said in reality "we'll ask different organizations to appoint their own," something the Alliance will have to take on faith.

"We've been working with them from Day One," said Bazzano of the Alliance and other organizations involved in the task force.

The resolution offered by the Small Business Alliance would have charged the task force with specifically examining the "methodologies and results" of the 2006 revaluation, in addition to scrutinizing "overall assessment procedures and practices." The task force was also asked to evaluate city expenditures, city taxation and "other matters that impact the amount and method of revenue generation by the City of Hartford."

In the resolution passed by the City Council the task force is asked to focus on the "best practices" of other cities in "protecting and growing the homeownership base," the impact of the property tax on business investment and reinvestment and on low and moderate income renters, the impact of non-taxable property on the city's tax base, and the "diversification of city revenue," which could add to or replace property tax income. There's no mention of the 2006 revaluation.

Both resolutions originally set a deadline of Jan. 15, 2008, for the task force to have its recommendations ready to be presented to the General Assembly, which has to approve any changes in city tax policy. In another amendment, however, the City Council bumped that deadline up to Dec. 15, 2007.

Piecuch questions whether that deadline is realistic, considering it has taken more than three months just to decide to have a task force. And what happens, asks Piecuch, if the Council rejects the Mayor's choice of appointees for the task force.

"Are we stalled further?" said Piecuch.

The bottom line for Mozzicato is that the resolution passed by the City Council on Aug. 13 was "nothing like the resolution we were looking for."

"We asked to be at the table to get this resolution done, let's do it together and move forward," said Mozzicato. "Instead we got more of the same. It created real distrust not only with me but with everybody in the city."

But Bazzano said the mistrust goes both ways. He said early in the process, there was a meeting in his office in which the Council and the Alliance agreed to try to postpone the implementation of the revaluation and to form the property tax task force. But at the "11th hour" said Bazzano, the Alliance changed its position, demanding the City Council not approve the city budget and "confirm" the appraisal process used in the revaluation "was wrong."

"What happened to the agreement we had?" said Bazzano.

The rift between the city and the Small Business Alliance appears only to be widening. Mozzicato said his group will e-mail its "findings" on the formation of the property tax task force to the city and try to get a public hearing where Alliance members can voice their opinions.

"They just alienated the group again," said Mozzicato. "I don't think they understand. The Hartford Small Business Alliance encompasses 1,500 businesses around the city. This is a critical mass. They're ignoring that constituent group."

Bazzano says the City Council isn't ignoring anyone, and that it's "trying to help everyone," something the Small Business Alliance may not understand.

"Their focus is small business," said Bazzano. "Our goal is to come up with property tax reform for everyone. That includes small business, residential, apartment owners, condo owners, everyone."