Rell Offers Compromise On Plan To Eliminate Car Tax

By Susan Haigh

Associated Press

HARTFORD – Republican Gov. M. Jodi Rell offered a revised plan to eliminate local car taxes Tuesday in an effort to mollify opposition from the Democrat-controlled legislature.

Rell said she has heard complaints from some senior citizens who said they would benefit more from the state’s existing property tax credit for homeowners, which would have been eliminated under the governor’s original plan.

“Some senior citizens have let me know that they believe the earlier plan would put them at a disadvantage because many no longer drive or have older cars and limited incomes,” Rell said in a written statement. “Frankly, their argument is a valid one.”

Rell’s revised proposal would allow people 65 years old or older who are single filers, heads of household or joint filers to keep the property tax credit. They also would not have to pay local car taxes.

The new plan would cost an additional $15 million, she said. Rell did not say in her statement where that money would come from.

The change comes as the legislature’s spending and tax-writing committees face deadlines to vote out a budget. The Appropriations Committee must wrap up its work on April 4. The Finance Revenue and Bonding Committee has until April 6.

Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, said Rell’s proposed compromise proves there are many flaws in her underlying plan and little enthusiasm among many legislators for the proposal.

“I think no one is talking about the car tax proposal any more. They’re trying to restart a discussion that no one got involved with,” Williams said of the Rell administration.

Williams said Rell’s revised plan would fix only one problem. He said cities and towns could still lose much-needed tax revenue, and Rell has no plan to fully reimburse them after the first year.

Williams also said Connecticut’s wealthy would benefit the most from Rell’s plan. He pointed to a recent New York Times article that detailed how owners of many luxury cars would save thousands of dollars if car taxes were eliminated.

For example, fashion designer Tommy Hilfiger, who has a home in Greenwich, owns 13 cars, including a red 2003 Ferrari Enzo Coupe that’s deemed to be worth $1.2 million. The tax bill on that car alone is expected to be about $6,450, the newspaper reported.

Yet Williams said Rell’s car tax plan still has some life.

“It’s not impossible that we would go forward with some version of car tax relief, but the way the governor has proposed it is very expensive, problematic and could result in higher taxes at the municipal level,” he said.

Many Democrats are wary about Rell’s plan because it eliminates the popular property tax credit on the income tax. Under current law, the maximum credit is $350. That figure will climb to $400 on July 1.