From: Susan Kniep, President
The Federation of Connecticut Taxpayer Organizations, Inc.
Website: http://ctact.org/
email: fctopresident@ctact.org
860-524-6501
March 26, 2006
REVAL IS FORCING PEOPLE FROM THEIR HOMES
SOLUTION: FREEZE
ASSESSMENTS
Public Hearing on
An Act Concerning Property
Tax Assessments for Residential Property
Raised Bill No. 701(Section 1)
http://www.cga.ct.gov/2006/TOB/S/2006SB-00701-R00-SB.htm
Sponsored by the State of Connecticut’s
Finance, Revenue and Bonding Committee
MONDAY,
MARCH 27, 2006 10:30 AM
Legislative Office Building, Room 2E, 300
Capitol Ave, Hartford, CT
AGENDA
http://www.cga.ct.gov/2006/FINdata/pha/2006PHA00327-R001030FIN-PHA.htm
On December
1, 2005 I spoke at the hearing held in Groton, Connecticut before the State’s Legislative Program Review
and Investigations Committee on Connecticut’s
Property Tax System . Their report can be found at the
following website: http://www.cga.ct.gov/2005/pridata/Studies/CT_Tax_System_Briefing.htm . Other reports by this Committee can be found at this
website: http://www.cga.ct.gov/pri/year2005studies.htm
Excerpt
from Bill 701:
Section
1. (NEW)
(Effective July 1, 2006) (a) Notwithstanding the provisions of section
12-62 or 12-62a of the general statutes, all appraised valuations of real
property as of July 1, 2006, shall remain unchanged, and shall not be
reappraised until such time as (1) existing real property undergoes a change in
ownership, (2) newly-constructed real property is purchased, or (3) a property
owner makes improvements to a property. Upon a change in ownership or purchase
of newly-constructed real property, such property shall be assessed at its
sales price. When improvements are made, the property's valuation shall
increase by the cost of the improvements.
*******
From Susan Kniep, President
The Federation of Connecticut Taxpayer Organizations, Inc.
To the Finance, Revenue and Bonding Committee
Re Bill 701, March 27, 2006
I am Susan Kniep, President of The
Federation of Connecticut Taxpayer Organizations, Inc. I had served as Mayor of East
Hartford from 1989 to 1993 and for several years on the Town
Council.
On December 1,
2005 I spoke at the hearing held in Groton, Connecticut before the State’s
Legislative Program Review and Investigations Committee on Connecticut’s
Property Tax System and raised many of the following issues at that time.
Property owners
throughout Connecticut
are struggling to maintain ownership of their most prized possession, their
homes. With annual property tax
increases exceeding their income growth, many property owners are forced to
choose between the basic necessities of life or their property taxes to keep
from losing their homes.
There is a
correlation between the property tax structure in our State, and the Eminent
Domain issue in Connecticut
where private interests can usurp the rights of private property owners if the
price is right. If someone cannot afford
to pay their property taxes, a lien by the municipality is placed on their home
or business. Ultimately a municipality
can force the sale of that property to a private party.
The injustice in Connecticut’s property
tax structure is that we are being taxed on unrealized capital gains. Unlike our stocks or bonds wherein we are
taxed upon the cash we receive as a result of sale or any interest or dividends
actually received, the value of our home is something simply written on paper
by Revaluation companies. We do not
realize the actual value of our home until it is sold. Therefore, we do not have the cash in hand to
pay for the steady property tax increases year after year.
State Statutes
governing Revaluation place a cost burden on taxpayers not only through the
significant increases of our properties as documented on a piece of paper but
also on municipalities which must budget to facilitate the process. In essence, the State is keeping those within
the Revaluation industry in business, while taxpayers become poor.
The property tax
system in Connecticut
is in crisis. I am in real estate. I have heard from young and old alike who
cannot continue to sustain annual property tax increases. Yet, we cannot address this issue without
concurrently looking at the issue of State Mandates. Those
laws which the State imposes upon municipalities which carry a financial burden
upon local property taxpayers.
Two mandates which are bankrupting municipalities are Binding Arbitration and Prevailing Wage. Our laws must be changed to prevent the
driving costs of wage and healthcare benefits in union contracts due to Binding
Arbitration and the high cost of construction born by local taxpayers due to
the existing Prevailing Wage mandates.
Approximately, 75% to 85% of municipal budgets support municipal
personnel related expenses. While those
who work in the private sector “At Will” are losing their jobs, or taking a cut
in pay and/or paying more for healthcare benefits for themselves, they are also
picking up the tab to pay for high healthcare, pensions and wage costs for town
employees which are factored into municipal budgets and which are driving up
property taxes.
Municipalities,
unlike the State, have only two primary means of raising revenue, property
taxes and fees. In contrast, the State
of Connecticut
has placed a tax on nearly every facet of our life, from the tax on a movie to
the conveyance tax on the sale of our homes.
I emphasize that
property owners can no longer sustain continued property tax increases. The solution to this crisis is to adopt Bill
701 and to not impose property tax increases until a property undergoes a
change in ownership. Further, we must reform our state mandates and think out of the box.
At the end of
2005, I had written to Governor Rell
and legislators proposing that municipalities be allowed to retain 1% of the 6%
sales tax generated from new businesses.
Further, there should be a mandatory audit of municipalities which
receive at least thirty per cent of their revenues in any fiscal year from the
state. This was a proposal made last
year by the legislature and should be enacted.
Also, it has
become apparent that our taxes have been driven by corrupt business practices
at the state and in some municipal governments.
It is also apparent that we have an urgent need for true campaign
finance reform to prevent influence peddling usurping sound business
practices. The State and the 169
individual towns must put their finances in order. There must be accountability of government
expenses while concurrently providing accountability of those who have a
fiduciary responsibility over the money taxpayers give them to finance State
and local budgets.
Thank you for your
time. In summary, we ask that you
approve Bill 701 and thereby implement a
tax structure which establishes the true assessed value of a home upon its
actual sale, allow municipalities to retain 1% of the 6% sales tax generated
from new businesses, reform state mandates and give local governments greater
control over their costs, require audits and provide accountability of how our
money is being spent, and most importantly, implement sound business practices
by instilling strong ethical standards and end the corruption which has
permeated our state and some of our municipalities.