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Property Tax Plan Sparks Debate

By DANIEL E. GOREN, Courant Staff Writer

December 22, 2007

Residential properties not occupied by the owners should be taxed at higher rates than owner-occupied dwellings, according to a recommendation by Hartford's Property Tax Task Force.

"We want to protect homeowners, and we want to reduce the burden on business," said Richard Wareing, the task force's chairman.

Under a 2006 revaluation, tax increases on properties not occupied by owners — whether multifamily homes, apartments or condos — are capped at 3.5 percent. But the task force's plan would eliminate that cap and generate an additional $23 million in tax revenue by 2010, Wareing said.

In turn, the city's commercial property tax owners would see a significant drop in their tax burden.

Mayor Eddie A. Perez created the task force after the city discovered last year that small businesses in Hartford would be disproportionately hit with large tax bills because of the 2006 revaluation.

The value of small business properties had climbed proportionately much faster than bigger businesses. Many small businesses complained, saying the bills — in some cases twice the previous year's — could force them to close or move out of the city.

The task force's proposal is far from being a reality — it still needs approval from the legislature — but its proponents say it is geared toward protecting homeowners who live in the city, promoting new home ownership and simultaneously decreasing the burden on the city's businesses as a whole.

But its detractors say it would hurt the city's poorest citizens — renters — and benefit the city's richest as property owners passed tax increases downward to their tenants.

"It clearly hurts the citizens in Hartford that can least afford to be hurt, and that is the renters," said Tim Sullivan, an activist whom many consider an authority on Hartford's property tax problems. "Their rents are going to go up as a result of this. I'm not sure where the benefit of this goes. If it is going to the commercial properties — if that is the case — then we are taxing our poorest citizens to benefit the commercial businesses. That is a regressive tax if I've ever seen one."

Wareing said the commission did not believe that tax increases would be passed on to renters because Hartford's rental market is regional and will not bear dramatic increases.

And he said thousands of units in the city are in owner-occupied homes, which will stay protected by the cap, keeping a "downward pressure" on rents.

And even if the entire tax increase were passed into people's rents, the effect would be no more than an estimated $500 to $1,000 a year per rental unit, in 2010 dollars, Wareing said.

Wareing said renters will benefit in other ways under the plan because the task force predicts that motor vehicle taxes will also go down if the recommendation is approved.

"For many people who are renters, their car is their single largest asset," Wareing said.

But if Wareing's assumptions are true, and tax increases are not passed to renters, Sullivan said he fears an increase in foreclosures, worsening blight because of deferred maintenance and an increase in tax delinquency.

State Rep. Art Feltman agreed, saying that "it would spread blight, and if you spread blight, who is going to want to buy a home near a blighted area?"

Feltman also said he believes that the recommendation did not directly address the main problem facing the city: A shift in commercial property values has hit the city's smallest businesses the hardest.

"The squeeze on small business is unfair and dramatic, and needs to be addressed, but this is a wrongheaded and backward proposal," Feltman said. "They are operating on the wrong part of the patient."