Assessor Says ‘Clunker’ Program Pushing MV Assessments Higher

By John Voket

Newtown Tax Assessor Chris Kelsey told The Bee this week that since local tax bills began arriving, his office is receiving “10 to 15 calls a day,” from residents asking why their motor vehicle assessments have increased.

Mr Kelsey believes the national phenomenon impacting tax assessments on vehicles across the nation is rooted in the federal “Cash for Clunkers” program, which offered robust rebates for individuals turning in old, poorly maintained or gas guzzling vehicles.

“The ‘clunkers’ program resulted in getting more than 680,000 vehicles off the road permanently, which resulted in positive environmental impact and enhanced public safety. But it also prevented a substantial number of those vehicles from being resold, resulting in a shortage of used vehicles just when the economy began to tank.”

This economic downturn then drove many individuals into the marketplace looking for quality used cars causing a perceived shortage of, and substantial inflation in, existing used car prices, the assessor explained.

“Connecticut assessors all base their motor vehicle tax assessments on the Kelly Blue Book values for those models,” he said. “And a lot of those values increased between October 2008 and 2009 — the last year we apply to the [current] 2010-11 tax cycle.”

While industry professionals saw the valuation increases coming nine months ago when the latest Blue Book was issued, it did not become universally apparent to tax assessors until they began preparing their current tax bills.

It was then that Mr Kelsey discovered the most substantial tax assessment increases were affecting used vehicles.

“I hope it is just a one-year anomaly,” he said. “We are seeing a spike this year. And I think that will self-correct next year when all the new cars bought with ‘clunker’ rebates hit the motor vehicle tax roles.”

Mr Kelsey gave two local examples of the upward movement in assessments, the first with a 2006 Chevy Tahoe that was assessed at $18,175 in 2008, and which increased in valuation to $20,675 in 2009. He also pointed out an economy-class 1999 Ford Escort that increased from $3,275 in 2008 to $3,500 on the current tax bill.

While overall, Mr Kelsey said Newtown’s motor vehicle assessments showed a net decrease, a “sector” of vehicles in town went up, generating the flurry of calls to his office.

“People never expect vehicle assessments to go up,” he said. “So obviously it is catching a lot of those affected by surprise.”