Crafting Our Budget: Eliminating the Motor Vehicle Tax
by Senator Bob Duff, 25th Senatorial District
Apr. 10, 2006

February 8 marked the beginning of the 2006 legislative session, and although it is the shortest session in the General Assembly's history, I know the length of time we spend in Hartford will have little to do with the amount of work we get done this session. As is customary on the opening day of session in the General Assembly, the governor addressed a joint convention of both the House of Representatives and the Senate, as well as guests and visitors. The mood was optimistic and the excitement about beginning another session to address -- and correct -- the problems in our state was palpable.

This year, the legislature is looking at cutting a number of taxes to stimulate the economy and give taxpayers some much-needed relief. I applaud those efforts and will lead the charge on the ones that I feel are prudent to the long term health of this state.

One of the highlights of the budget address was a proposal to eliminate the motor vehicle tax. Here's why I am not a fan of the idea:

• The proposal eliminates the important property tax credit on the state income tax form. This is an important deduction for working families and seniors.
• Not only would Connecticut taxpayers lose out on the state homeowner's tax credit on their state income taxes, but they would also lose the deduction on their federal income taxes for car taxes paid to their municipality.
• Casino grant revenue that is already sent to towns would be wiped out.
• It's not paid for. We will need to find approximately $61million dollars extra on top of the $350 million dollars already allocated. Total cost to the state is more than $497 million dollars.
• In addition, if the rosy revenue projections don't come through other state monies will need to be shifted.

Serving on the Appropriations Committee has opened my eyes to the factors that are beyond our control. As you know, the federal government isn't coming to anyone's rescue. The federal proposed budget will leave states to pick up where they have left off, especially in the crucial areas of education, energy and transportation. Under the proposed plan, the federal education budget will be cut by $3.1 billion, eliminating 42 education programs. Millions from federal grants to states to help low-income residents pay for their sky-rocketing heating and electricity bills will be slashed, as will a $287 million program which lends money to states to help finance transportation improvements. We are like many other states in that regard.

Connecticut's fiscal health is positive at the moment, but it would be irresponsible to pretend that the federal budget cuts won't have a detrimental affect on our state's ability to fund investments and improvements. In the past our state ran multi-year deficits forcing us to make difficult choices in order to balance Connecticut's checkbook.

As a leading proponent of property tax reform, I want to make sure every consideration is given to ideas that bring meaningful and long term relief to our citizens. This year, my agenda is to create and maintain an economic climate in this state that fosters job growth and retention. All proposals that come before the General Assembly must be viewed in that context. Whether it is an idea to cut taxes or increase funding in critical areas such as transportation, any idea must be targeted toward solid growth and real reform.

There is bi-partisan legislation making its way through the Capitol that will keep our state competitive. There will always be various proposals and the General Assembly is a good place to debate them, but I am only interested in the ones that will bring long lasting relief and meaningful reform. We owe that to you, the taxpayers.

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