Connecticut Senate Leader Pushes New Property Tax
26 January 2021 - 10:33PM
Dow Jones News
By Joseph De Avila
The top lawmaker in the Connecticut state Senate is calling for
a new tax on homes with a market value of $430,000 and more to help
pay for property-tax relief in the state's cities and rural
areas.
Senate President Martin Looney, a Democrat, said the proposed
tax would raise $73.5 million annually that would be funneled to
cities for property-tax relief. A homeowner with a $500,000 home
would pay about $50 under the proposal, while a homeowner with a $1
million property would pay about $400.
Mr. Looney also said the bill would make property taxes more
equitable across Connecticut.
"Many communities will benefit from it and see a significant
decrease in their property-tax liability," Mr. Looney said
Tuesday.
The property-tax proposal comes as lawmakers need to pass a
budget closing deficits of more than $1 billion in each of the next
two fiscal years. Gov. Ned Lamont, a Democrat, will submit his
budget proposal and plan to close those budget holes in
February.
Mr. Lamont has been reluctant to go down the road of raising
taxes. A spokesman for the governor said he opposes the proposal
and remains against broad-based tax increases.
Mr. Looney said he hasn't formally met with Democratic senators
to gauge their support, but said his caucus has broad interest in
property-tax reform.
Senate Republicans came out against the bill. Republican Senate
Minority Leader Kevin Kelly said Mr. Looney's proposal would hurt
middle-class families.
"During this pandemic, middle class families are struggling
financially and need our help, not more burdens," Mr. Kelly
said.
Cities would receive the bulk of the tax revenue generated by
the proposal to help mitigate high property-tax rates. Urban
centers like New Haven tend to have high property-tax rates to make
up for the swaths of land occupied by hospitals and universities,
which are tax exempt.
Cities like Hartford and Bridgeport would benefit under Mr.
Looney's plan while wealthy homeowners in towns like Fairfield and
Greenwich would face higher tax bills. Rural towns would also get
revenue from the new tax, Mr. Looney said.
Mr. Looney has also proposed a new surcharge on capital gains,
which would produce $131 million in annual tax revenue, a portion
of which would also fund property-tax relief, he said. The proposed
1% surcharge would be applied to the sale of capital assets for
individual tax filers earning $500,000 and up annually or for
married couples earning $1 million.
Capital gains are currently taxed at 6.99%, which is the top
income-tax rate in the state. The proposed 1% surcharge would be on
top of the rate currently charged. A similar proposal for a capital
gains surcharge failed to gain traction in the state legislature in
2019.
Mr. Looney said his proposal would help the governor keep his
campaign pledge to bring property-tax relief to the state.
Write to Joseph De Avila at joseph.deavila@wsj.com
(END) Dow Jones Newswires
January 26, 2021 17:18 ET (22:18 GMT)
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