DeStefano promises tax breaks

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DeStefano promises tax breaks

October 06, 2006

Mary E. O'Leary, Register Topics Editor

MERIDEN - Democratic gubernatorial candidate John DeStefano Jr. has proposed a two-phase tax relief plan that would provide immediate relief for senior citizens and middle-class homeowners while eliminating the tax on manufacturing equipment.

"With Jodi Rell as governor, Connecticut now has the second worst property tax burden in the nation - and it just keeps getting worse," said DeStefano.

He would cover the estimated $455 million cost of phase one through a combination of a millionaire's tax, surplus funds and a temporary surcharge on the real estate conveyance tax.

In the second phase, DeStefano would look to savings in state government through reorganization and tightening up of bonding to support a $10,000 property tax credit for small businesses, homestead and car tax exemptions, a boost in the state education foundation grant and fully funded payments to towns with high amounts of tax-exempt property.

Rell's campaign spokesman Rich Harris questioned how DeStefano would finance the costs of phase one.

"Mayor DeStefano has spent this millionaire's tax three or four of five times over. The bottom line is there simply isn't the money there, and if the mayor were to do all the things that he says he is going to do, the only way to do it is through income tax increases," Harris said.

DeStefano, New Haven's six-term mayor, has advocated for major property tax reform by making the state a fuller partner in support of education funding. Connecticut now is the most dependent state in the country on funding K-12 education through property taxes.

"Our dependence on bad property tax policy is not only costing us jobs and home ownership, but it's resulting in bad educational and bad land use policy," said DeStefano, who in 2003 was chairman of the bipartisan Blue Ribbon Commission on Property Tax Burdens and Smart Growth Incentives."

After providing some immediate relief in the first year of his plan, he would tackle the bigger issues in the second year by developing a consensus on land use and education funding.

"The real opportunity of property tax reform is to also change the way we think about how we are going to grow and to remove this destructive dynamic that now exists in our public schools," DeStefano said. The current system pits towns against each other for development and ends up with shortchanged education programs, he said.

Harris called Rell's proposal for the state to reimburse municipalities for car taxes, "true property tax relief. You simply don't pay the tax anymore." Rell would shift some of the millions in casino revenues to support this.

DeStefano said her plan doesn't get at the root causes of bad land use, sprawl and underfunded education programs, while it mainly helps citizens with expensive cars.

For the first phase, DeStefano said he would propose three initiatives:

>A for a property tax freeze to 2006 rates for seniors 65 and older whose annual income is $46,000 or less for a single person or $54,000 or less for a couple living together. He estimates it would benefit approximately 150,000 households. Towns would be reimbursed for the lost revenue.

>A $1,000 property tax rebate when middle-class residents file their state income tax. There are an estimated 614,000 owner-occupied housing units eligible for the relief.

>Immediate elimination of the tax on manufacturing equipment, which is now being phased out. The state has already lost 107,000 manufacturing jobs in the past 15 years and the tax puts it at a competitive disadvantage.

>The millionaire's tax would be .5 percent on incomes over $1 million (joint filers), and 1 percent on incomes over $2 million and is expected to generate $251 million in revenues.

Sara Vega, 43, a single mother with two daughters in college, said she welcomed the tax rebate. "It gets difficult balancing everything," she said of her expenses. "We need to ease the burden somewhat."

DeStefano held his press conference on Vega's property in Meriden.

Mary E. O'Leary can be reached at 789-5731 or moleary