Governor M. Jodi Rell surprised everyone on opening day of the legislative session by proposing to eliminate the property tax on cars, prompting everyone in the General Assembly – maybe everyone in the state – to sit up and take notice.

The Governor’s proposal would completely eliminate the property taxes on your cars, passenger trucks and motorcycles and on passenger vehicles acquired through long-term leases. Unregistered automobiles, business-owned vehicles, and vehicles that are recreational in nature are not covered under the Governor’s proposal. Second, the state would fully reimburse municipalities for all of the lost revenues in a new grant that would be separate from the general fund.  And the best feature, in my view, is that you will now know that ALL the casino funds will go to the towns to lower your property taxes.

Where, you might ask, is all this money going to come from? Right now, about eight percent of a municipality’s property tax revenue can be attributed to the car tax. Statewide, that comes to about $500 million annually. Historically, the state takes in more than $400 million each year from the two Indian casinos in revenue generated from their slot machines. That amount has been growing an average of seven percent a year, and there is no reason to assume that it will not continue to do so. Up until now, the casino money has been used in the general fund to pay for various state programs. However, the Governor proposes to use that money to reimburse municipalities under a new “Casino Assistance Revenue” or CAR grant program. Governor Rell would pay for this new program by eliminating the state’s personal income tax credit, valued at $400 per taxpayer for Income Tax Year 2006.

When considering the Governor’s proposal, it is important to keep in mind that state residents, municipal government leaders and legislators have been begging for meaningful property tax relief for years. It is also important to keep in mind that the property tax on cars is unfair. Here are just a couple of examples. The property tax bill on a 2002 Toyota Camry Sedan 4D SE in Norwich is $292, while the property tax on the same car in Lyme is $138. A taxpayer in Greenwich has to pay $273 in property taxes on a 2005 Mercedes-Benz Sedan 4D C240 (AWD), but a Waterbury taxpayer has to pay more - $278 – in property taxes on 2000 Chevrolet Cavalier L-4 2D convertible. What’s wrong with this picture?

A few citizens will not benefit from the current proposal – those home owners with low incomes and no cars, or single homeowners with only one car, like me.  I believe we can amend the Governor’s bold proposal to accommodate this disparity, and still preserve this important first step in meaningful property tax reform that will put real dollars back into your wallets.  As always, I am interested in your thoughts regarding any of the issues important to our state, especially our corner of it.  I can be reached at the Capitol at 1-800-842-1421 or you can send me an e-mail at Catherine.Cook@cga.ct.gov.