Date: Fri 27-Feb-1998

Publication: Bee

Author: STEVEB

Quick Words:

selectmen-tax-deferals

Full Text:

Selectmen Suspend Tax Deferal Program

BY STEVE BIGHAM

The Board of Selectmen voted unanimously Monday night to suspend the town's

tax deferral program. The idea for the program originally came from the

Economic Development Commission (EDC), and that is where it is now returning.

This will not affect the two companies in town that currently have tax

abatement applications pending, the selectmen said.

The selectmen have asked the EDC to submit another business incentive program

that "may or may not" include a tax deferral. The current program has created

some confusion. Two new businesses thought they had tax breaks coming to them,

but town officials insist no such agreement exists.

"A number of things need to be modified," First Selectmen Herb Rosenthal said.

"There is no objective criteria for the first selectmen to use in determining

which companies receive tax breaks and which don't. If you recommend one and

not another, there's nothing to hang your hat on as to why."

The program has been a source of frustration for town officials in recent

months ever since Neumade Products came forward last month claiming it had

been offered tax breaks from the Bob Cascella administration. Town officials

were unaware of any "offers," and said they simply informed the companies that

Newtown was working on a plan that, if approved, would provide the companies

with what would amount to a savings of more than $70,000 per year for the

first five years.

The source of the confusion appears to be in that the program was never

approved by the Legislative Council and now there is some doubt as to whether

or not the companies will get what they were allegedly promised.

Last year, EDC members, seeking a tax break ordinance, presented the tax

deferral program to the council. Afterwards, the council made some suggestions

for changes, but the EDC never returned after its original presentation. The

Cascella administration then passed a resolution supporting tax breaks, a move

that came as a surprise to the council, which was still awaiting word from the

EDC.

Mr Rosenthal sits in the first selectman's chair now and he is not a proponent

of tax incentives, saying they do not necessarily work to the town's

advantage. Some members of the Legislative Council are also against tax

breaks.

The selectmen stressed that their decision to suspend the program will not

affect either Neumade products or Sonics & Materials.

"I would agree to withdraw the program for now, as long as we make sure that

those two applications be resolved," Selectmen Joe Bojnowski said.

The selectmen said the program included too many open-ended areas that leave

the town "vulnerable" and may have made some companies feel "misled."

As Economic Development Director Liz Stocker pointed out, there are other

incentives -- such as road improvements and adjusted sewer assessments -- that

Newtown could offer companies, instead of tax breaks.

"If the tax deferral program is so disliked, there are other ways of going

about it," she said.