Connecticut taxpayers would no longer have to pay a property tax on cars as of next July. That’s one of the provisions of a tentative budget compromise reached by the state’s Republican and Democratic legislative leaders.
In all the months of budget impasse this is the first mention of the provision. House Minority Leader Themis Klarides made the surprise announcement while briefing reporters on the tentative budget deal. Klarides says in the first year of the two-year budget, the state would maintain a cap on how much towns could charge for the tax.
“And the second year the car tax would be eliminated…eliminated…yes…where would that money come from…well towns and cities would have to make difficult decisions on.”
A short while later Democratic House Speaker Joe Aresimowicz confirmed the decision.
“It’s a heavy cost to actually collecting the car tax. We heard from the auto dealers that going to buy a car, cleaning up the tax lien on a vehicle, some towns only clean it up once a week, they have special lines at the DMV for dealers to go there to try to get that. It’s really a nuisance for all the taxpayers of Connecticut and we’d like to alleviate it.”
Connecticut governors have proposed elimination of the property tax on cars in past years only to be rebuffed by the legislature. The tax generates hundreds of millions of dollars a year for towns and cities. They’ve always asked for state reimbursement if the tax is eliminated.
The legislative leaders expect a General Assembly vote on their compromise budget next week.
The tentative budget agreement would also raise cigarette taxes, make public school teachers contribute more for their pensions, reduce the Earned Income Tax Credit for lower-income families and end the $200 property tax credit for many middle-income taxpayers.