Governor Lamont noted last week that he was considering a real estate tax break, apparently in connection with his campaign for re-election next year. Of course, the whole state has been thinking about property tax breaks for decades and a lot of politicians gossip about it, so where is it?
Because the trend in property taxes in Connecticut has been and has long been higher. At best, some cities manage to keep their property tax rates constant for an occasional fiscal year. Then they go up again.
The governor’s idea of a property tax break is just a property tax credit on state income tax, a tax credit that has occasionally surfaced over the years when governors wanted to pose as a state election approached, a kind of bribe for voters. But the property tax credit isn’t a real relief, just a replacement of a small amount of local property taxes with state tax revenue. The net tax amount does not change, and the property tax rate of a city does not change either.
If the state government’s financial situation deteriorates, the property tax credit will be reduced or abolished.
On balance, this type of wealth tax relief was offset by government tax increases.
Some argue that this tax shift is an improvement as the state government’s tax base is much broader than the local tax base, allowing the state to tax the wealthy extensively. But for most people, tax shifting is a wash and the only real beneficiaries are the government employees and dependents, who get most of the money.
The long-standing failure to obtain relief from property tax may seem strange, as every state budget contains funds for cities that are touted as property tax breaks. Most of this money, however, is used to increase the pay of unionized local government workers, which typically devour at least two-thirds of local government budgets.
So there can be no real estate tax relief until municipalities have control over their labor costs, and this will remain impossible as long as state law imposes mandatory arbitration on municipal workers’ union agreements on municipalities.
Relief of the property tax would require the repeal of binding arbitration proceedings or at least allow the municipalities to choose the arbitrators who set the terms of the contract. It would require cities to hold referendums on increasing municipal property tax and a state law that sets a cap on municipal property tax rates.
Above all, the public would need to wrest control of state and local government from the unions of government employees who control the majority party in the state. Because of this, no Democratic governor is likely to give real estate tax breaks.
So, thinking about a property tax break, as the governor says, is about as effective as thinking about a ham sandwich when someone else has already eaten it.
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For many months the governor and many Democratic legislators have sought to incorporate Connecticut into the Transportation Climate Initiative (TCI), a regional agreement to increase wholesale taxes on gasoline to raise money for less polluting transportation. Proponents of the deal said they would not increase Connecticut gas prices by more than 15 cents a gallon.
But now gas prices are skyrocketing – up $ 1.34 a gallon, or 65% last year. The Biden administration has crippled the US energy industry and inflation is raging and eroding standards of living in general. So the Democrats seem to be losing their enthusiasm for higher gas prices.
Support for the TCI is waning and 11 Democratic US Senators, including Connecticut’s Richard Blumenthal, called on the president last week to cut gas prices, possibly by releasing oil from the strategic petroleum reserve.
In particular, gas prices and inflation in general are likely to have a major impact on the state and congress elections next year. What is the political price the Democrats in both Washington and Hartford are willing to pay for their environmental behavior against carbon-based fuels?
Probably not much, then they will show that they never really believed what they said about the supposed plight of climate change. This emergency will prove to be less urgent than the next elections.
Chris Powell is a columnist for the Journal Inquirer.