Tuesday, February 07, 2006

State of the State

The State of the State address will be delivered Wednesday at noon. If you aren't near a TV, you can watch the speech on the web via CT-N. Gov. Rell is expected to outline her transportation and economic initiatives. Legislative Democrats have already beat her to the punch, proposing massive transportation improvements that will take new taxes, tolls, or both to fund.

I'll be on the road during the speech, too far north to catch WTIC or other Connecticut radio stations, so I'll have to catch up when I return. Commentary about the speech and the start of the legislative session can go here.

Update 2:30pm: The big focus is on Rell's startling proposal to eliminate municipal property tax on cars. Here's the relevant text from the speech:

Under my plan, beginning this July you will no longer have to write a check for your car taxes. It will be a thing of the past, and the real property tax relief that so many have been talking about for so long will finally become a reality.

Direct property tax relief, with money actually put in the wallets of taxpayers. Not indirect property tax relief that is little more than spending relief for elected officials.
...
How we can afford to do this?

We will intercept the $435 million we collect each year in casino revenue along with another $61 million in General Fund revenue to ensure municipalities will not lose local revenue as a result of the elimination of the property tax on automobiles. The balance of my Casino Assistance Revenue or CAR grant will come from eliminating the $350 property tax credit that some taxpayers received.
...
If you are a Bridgeport resident who owns a 2003 Four-Door Taurus Wagon, you are paying $309 in annual property taxes. The same exact car carries a tax of $103 in New Canaan. So, a taxpayer in Bridgeport pays a tax bill that is 3 times higher than a taxpayer in New Canaan.

I like the idea. It will benefit more people than the current homeowners' tax credit, and it does away with a disparity between cities and wealthier towns.

61 comments:

Anonymous said...

I guess the D's can't help themselves. Over a half BILLION dollar surplus, the session hasn't started, gas prices near an all-time high, congestion bad enough already, and what's the proposal? More gas taxes, more tolls! No wonder Rell is going to win in a cakewalk.

Don Pesci said...

It's worse than Anonymous thinks. Every year, around budget time, the script is set and unvarying: Earlier prognostications have proven to be in error, a projected defict has turned into a modest increase in revenue, and most of the conversation is devoted to disposing of the surplus.

In the meantime, spending has increased. No one wants to talk about that. And yet, that is the problem. It is the gradual increase in spending and attendant tax increases that is driving business from the state. Despite Gov. Rell's insistance that things may have improved in the last two years, Connecticut is still dead last among states on job growth.

What to do about it? Disposing of modest increases in revenue -- due largely to the general economic health of the national economy and temporary spikes in some sectors of the economy in Connecticut -- does not begin to address the real problem. Can we talk about it?

mod.dem.like.jfk said...

Don't forget to check out the Courant's articles about Homeland Security and Education Aid to CT being slashed over the next few years. Its only going to increase the burden on property taxes, gas taxes, etc.

That is the magic of the Bush tax cut, its a trickle down tax cut. The trickle down is in the burden. All of us pay more in state taxes while the State has to cut corners with the loss of federal aide so the richest 1% of Americans get more back.

If there was ever a reason to work hard to elect Dems to Congress (including reelecting incumbent ones to avoid sending another R from CT) this is it.

Anonymous said...

Talk about it? There is nothing to talk about. This is an election year and you don't get re-elected by cutting spending/programs. Follow the bonding process and watch how many Millions are given away to secure incumbent seats.

Anonymous said...

Where is The DeStefano and Malloy Campaigns in trying to " step on the story" with Rell's State of The State speech and resultant publicity? Both these campaigns and their staffs and advisors are sleep walking thru this campaign...we expected alot more from them...

CTRepublican said...

It's ironic that some Dems talk about the shift of taxes from the federal government to state government like its a bad thing, like the GOP has fooled voters by delivering federal tax cuts. They forget that the point isn't to just cut taxes, its to diminish the role of the federal government and empower the states (at least it used to be, and ought to be).

Here is the thing: I'm absolutely FINE with taxes being increased at the STATE level, if it meant that instead of sending $1 to Washington and receiving $.90 cents back from the federal government in transportation dollars. At least when I send my $1 to the state coffers, there is a greater chance that I'll get a full dollar's benefit from it.

the wandererrr said...

d.p:...the real problem. Can we talk about it? Why would we do that? The granny governor isn't interseted. The two political parties that control the legislature and their curent seats aren't either. My time is better spent making more money so I can pay for what they have their heads in the sand about. And eventually find a leader who will address the issues but that isn't gonna happen this time around.

Anonymous said...

Great, a new department of energy for the State of CT. Excellent, lets create more jobs- but only in the government sector. I bet that one sails through the Democratic legislature.

Brass Anon said...

Instead of finding ways to spend the surplus, I'd like to see the legislature give our money back to us by cutting the sales tax. Not only would it boost sales, it would incrementally start to eliminate a regressive tax and increase buying power.
--------------------------------
As I see the economy teeter as a result of huge benefit outlays to employees in all sectors, I also think that it might be time for newly-hired government employees to begin switching over to 401-K type pensions, provided they are adequately funded by the employers and mandatorily funded by the employees.
I also think that Health Savings Accounts funded by the employer, and coupled with high-deductible insurance policies are a means of using the market to bring down health insurance costs.
My opinions may not be right, but a debate should occur on these important issues so that we start heading in the right direction.
Because the more I travel around the state lately, the more I notice an increase in very poor people. Our policies need to develop such that our economy can re-develop a stable middle class.

Franks said...

Rell's trade of the car property tax for the $350 credit seems like a bad deal, if you pay less than $350 for your car.

ctkeith said...

Empty suit,empty Budget and It's DOA.

Greenwich will end up with more money than Bridgeport with her proposal.How does something revenue nuetral to the municipalities help them?

Jodi should have really returned to WCSU and finish her degree BEFORE she took a posiion she wasn't quaified for.

the wandererrrr said...

The DOE proposal is a consolidation of about six or so agencies and it was proposed by Nickerson out of Greenwich a few months ago.

Getting rid of the car tax is good for everybody and it should cut down on the cost of collecting taxes for every city and town if they choose to recognize the reduced workload. It also stops the kids from the suburbs who live in the cities from registering their cars at daddy's house.

Everything else was either boring or about throwimg money at a problem with no policy to guide it. Money can't buy love but it does buy votes.

Proud Moderate Dem said...

ctkeith, seems like 78% of CT seems to think she is qualified just fine... please focus on real issues so we have a chance of winning and not scurrilous attacks.

Anonymous said...

In response, Franks, this is actually a great opportunity for most middle class and poor families. The credit is a one-time per household $350 deduction. Most households have more than one car, so they will enjoy that much more savings. Also, most people at or below the poverty line don't own their property, they rent and therefore can't accept the credit. Anyone who owns a car in CT will be able to benefit from this cut. And "frankly," most people won't be paying $350 for a car - unless you own a Hummer in Bridgeport. Our poorest areas with the highest millrates are where folks are paying the most and its where these cuts will be most welcome. I didn't think I'd ever toe a Republican governor's line, but come on...this is a no brainer.

the wandererrr said...

I forgot about Jodi's big government proposal to add two more 'advocates' to the payroll - one for residential energy consumers and one for businees energy consumers, of course. What we really need is a consolidation of all the various advocates in and around the state - child, victim, manged care, and the list goes on. Half the time Blumentahl is the advocate anyway since he gives Ralph Nader a boost for free at taxpayer expense because what he's really doing as AG is running for the US Senate.

Genghis Conn said...

Heard the speech on the way down... I like the elimination of the car tax. Still a little wary about where the money is going to come from, but otherwise it makes sense. The $350 homeowners' credit is tied to income, and not everyone can claim it (renters, for example, and the ton of people who work out of state but live here). Our major cities have very high tax rates: the poor and middle class will have money put back in their pockets through this plan.

Rell's going to win either way. If it's passed, she gets credit and we don't have to pay any more car taxes. If not, she has a great campaign issue to clobber Democrats with.

The full text of the speech, by the way, is here.

ctkeith said...

hey proud moderate Dem,

Doesn't your boss have enough problems with his Mug all over Crooks and Liars?

We all know the Status Quo is just fine with you and anything else threatens your job but those of us paying attention also know you're really are Crooks and liars.

ctkeith said...

GC,

At least your comment ddn't Disappoint.If it weren't for conventional wisdom you'd have none at all.

Genghis Conn said...

Okay, Keith, I'll bite: what's your objection to the plan/speech?

Anonymous said...

CTkieth

"you're really are Crooks and liars." = "you are really are crooks and liars."

Well said

Proud Moderate Dem said...

ctkeith, what on earth would you know about having a job?

Frank said...

Anon (2:21) Anyone who paid property tax on a home or auto can claim the credit, a renter would be limited to the amount of the auto tax paid. CTDRS has a calculator, if paid propety tax on a home and your auto tax payment is less that $350, the difference is lost money.

ctkeith said...

PMD,Good one ,Ken

GC,Its all a gimmick and in the end Towns like Greenwich Will more than likely end up getting a bigger break per capita than places like Bridgeport.

Rells had 2 State of the State speeches Now and all she's proven she's capable of is Kicking the ball down the road.She's a placeholder,not a Leader.I like divided Government as much as most nutmeggers but the Executive has to lead and she's just too comfortable with the status quo.

Proud Moderate Dem said...

ctkeith, as the new york times said today, dems need to not just critisize, but we need to offer alternative workable ideas. the country doesnt think the republicans are capable of the job and are ready to switch, but they havent been convinced by the dems that we can do it bc we havent effectively showed our alternative plans. your criticism of rell withiout offering workable alternative plans does not help our mutual democratic cause.

DeanFan84 said...

It's a lousy plan, and a cheap election year gimmick. First, what I would do, and second what's wrong with Rell's plan.

If I held power, I would put forth a plan that exempted the first $5,000 of a car's valuation, and then I would legislate that every municipality levy the same 2-3% property tax on values above that threshold.

If I could, I would go further and claim the car tax revenues for the state, to be redistributed back to the towns and cities on a per pupil basis.

Also, --if the idea is one of fairness,-- I would create a single statewide insurance pool, such that your insurance rate would be the same no matter where in CT you live. (Right now you get hammered if you happen to live in a city. I'd like to see a comparison of rates between that car in B'port, and that car in New Canaan.)

What's wrong with Rell's plan is:
1). It walks away from an existing revenue stream that people are used to paying.
2). It gives much more money back to rich folks driving $40,000+ cars, than it does to poor folks who don't even make that much in a year.
3). The comparision that Rell put up is from two obvious extremes. It warps reality, and I look forward to the statistical analysis that will show that Jodi Rell is as stupid and opportune as the Governator.

Furthermore, Statehouse Dems should use their power, and Rell's initiative to pass something like I just outlined. It's not like she would dare veto it.

Genghis Conn said...

I don't know, Keith, I hear a lot of vague talk from Democrats about property tax reform. This is the first concrete plan I've heard. Unless you have a better idea...?

ctkeith said...

PMD,

Theres nothing mutual between me and a Lieberman staff Member.You Just know way to much about me to be anything but.

Proud Moderate Dem said...

deanfan, really enjoyed your thoughtful response. i think we as dems would be better off if you left out the calling rell stupid part though. however, the first part is exactly how we can seize this opportunity and elect some dems. have any other states done the insurance thing? how did nj solve their crisis a few years back, do you know?

Proud Moderate Dem said...

ctkeith, for disclosure, not a lieberman staff member. not everyone who disagrees with you is a lieberman staff member, btw. i'm just a dem who is very interested in our party finding common ground and winning elections. doesnt take much effort to check out comments you make on other blogs. while i may not be a 'professional' blogger i can get myself around.

DeanFan84 said...

Well, PMD. That's the nicest thing you've ever said to me.

And don't worry. The Statehouse Dems are just as stupid as Rell. lol.

Any bets as to who wins on this issue?

Anonymous said...

Dean Fan...A "statewide insurance pool" ??? Do you know nothing about insurance? The whole point of pooling risk is to spread it out among a greater number of people paying premiums that are commensurate with their loss history and the projected risk of the territory where their vehicle is "garaged." Is it fair to say that because their are fewer accidents, fewer cars, and fewer claims made in Ridgefield, that person should pay a lower premium than someone living in Danbury? Yes. Insurance rates aren't based on income - their based on the predicted risk of loss that an insured poses and, logically, risk is going to be higher in a city like Hartford than in a quiet suburb. If you have a single risk pool and single rate for the state, those monies will be gone in a flash and the folks who live in the cities and need to make claims won't be able to have their policies honored.

Anonymous said...

FYI, Elimination of the motor vehicle property tax has been around for years, Sen. Cappiello has been amoung the sponsors of bills, but has been opposed by town officials. It's hardly an original thought.

Anonymous said...

Additionally, a single rate for the state would put us in EXACTLY the same position as NJ was at the end of the 90s - overregulated rates that make it a noncompetitive insurance market and companies will pull out. The real losers were the citizens, who were then forced to pay an inflated rate if they wanted to remain on the road. Plus there would be ZERO incentive for folks like Travelers, The Hartford, Aetna, and ING to remain in the state. So not only would we get killed on insurance rates, we would also be putting the final nail in the "Insurance Capital of the World" coffin.

ctkeith said...

GC,

Who's taxes does it raise and whose does it cut?

Wheres your analysis showing it cuts anyones tax.(it seems to raise mine about 200 anually )

It seems to me this is just like W's tax cuts and the top income earners will again get a tax cut and everyone else will get screwed as usual with all Republican proposals.

My problem with your analysis,or lack there of, was that you spun the state of the state proposal just like the MSM would have for W by saying that either way the Dems tried to play it they're going to lose instead of figuring out what the effects would be.We 've come to expect this from the corperate media but Blogs are suppose to do better.

sanity said...

While my overall assessment of Governor Rell's speech and budget plan largely differs from DF84's,I do find DF84's thoughts on the automobile property tax very worthy of consideration.

I am not a big fan of continually taxing success harder. But I think DF84's idea is well worth looking into. Done properly, all car owners get an opportunity to receive some property tax relief, and especially to those who need it most. Again, I'm not a big fan of penalizing success and I can't believe I am saying this, but in this particular case, hey, if it is a real problem for you then sell the Mercedes and buy a Lexus.

I wholeheartedly agree with Anonymous on the insurace piece - right on dude! I'll pay for my risk and bad driving. I won't cover someone else's risk and bad driving that I have no control over.

And Anon - thank you for mentioning and recognizing Senator Cappiello and his proposal on the Motor Vehicle Tax. He is a great guy, a devoted husband and new dad, a good young Republican, a very dedicated legislator and the State Republican Party needs to include him more in their party efforts.

Franks said...

Sanity

"I'll pay for my risk and bad driving. I won't cover someone else's risk and bad driving that I have no control over."

Isn't this exactly what an insurance territory does, assign risk/costs to neighboring individuals, instead of responsible individuals.

Shouldn't a great driver, no claims, in an urban area get the same rate as a suburban area.

Rates based on claim histories seems fair.

Anonymous said...

How come every time Rell gives the D's what they want, all they can do is whine? We want campaign finance reform ... got it! We want property tax reform ... got it! We want more money for childhood education ... got it!

What does she have to do to get any credit from the D's?

sanity said...

Insurance Industry assigns people to risk pools based on statistical experience. Look at your insurance policy and you will see that there isn't just one single price listed. There is a rate for each component of your policy.

My next door neighbor who has had one more accident and two more traffic tickets than I have pays more in insurance than I do. In the liability and collision components of our insurance policies, we are in different risk pools and my rate is less.

However, we are in the same risk pool for the theft component of our insurance policies and our rates are the same relative to the make, model and year of our cars. My father and I both have the same year, make and model automobile. I pay more in the theft component of the policy because I have chosen to live in a location where there is a higher incidence of theft than where my father lives.

So, in answer to your question:

On the liability and collision component, yes, I believe risk pools should be based on quality of safety and claims experience and not geography (adjusting for local CPI of course - cost of repairs is more in Norwalk than in Putnam) On the theft component, no, I believe risk pools should be based on geographical theft experience.

I meant to keep it simple in my prior comment and see that I definately oversimplified the statement I meant to make.

Anonymous said...

There are several brief analyses of how the Governor's budget affects child and family programs under "What's New" here.

Anonymous said...

Rell going to change stripes and will become a D, ..unitl November. Why give JD/DM an opening, she turned on the soda bill and will adopt any position to be elected.

DeanFan84 said...

Assigning insurance rates by township is an arbitrary decision. You could just as easily assign them by county, state, or census bloc.

My census bloc in New Haven is a fairly conservative one. Why must I be lumped in with all the reckless and underinsured drivers of less conservative census tracts?

The last was a rhetorical paragraph, but I do want to emphasize my point. Insurance fairness goes right along with tax fairness. It shouldn't matter where in CT you live!

What I also would like to see is a study of the varying tax bills on $400,000 houses across the state. I bet they range from $2500 up to $7000.

If the different rates were based on the frugality of the respective town governments, that would be one thing. But usually there are greater factors at work.

Why should some people have it so much better than others, when we all share the same Connecticut? FWIW.

Genghis Conn said...

Actually, Keith, my taxes will be lowered. So will the taxes of anyone who lives in state but works elsewhere. The taxes of renters (who pay car tax but can't claim a homeowner credit) will be lowered significantly. People who live in cities (high mill rates) will see significant tax reductions: even those who own homes.

Not everything relates to Bush. Sheesh.

Anonymous said...

Rell's favorability will go even higher after today! The only people who don't like her is DeStefano, Malloy and their staffers. Outside of that, this November will be a BLOW-OUT.

Franks said...

Sanity

Theft losses from where the vehicle is stolen are claims, aren't they. If I drive a Toyota Camry, it's my choice and the claims history here seems to be higher, so it's my risk.

More vehicles are driven into urban areas, but I should assume my own risk in doing so, doesn't basing losses on the theft location assign losses to the unresponsible residents.

Anonymous said...

Dean Fan...I'm glad to see that your socialistic tendencies extend beyond your choice of screen name. Insurance rate fairness and tax rate fairness most definitely should not be considered synonymous. With regard to your insurance rates, it should "matter where in CT you live." Auto insurance is not a right or entitlement, it is a consumer product. You are paying to transfer your loss exposure to someone else in exchange for a fee. Obviously, insurance companies are looking for the most accurate way to match price to risk so that they can be more price competitive without losing money. If they could break the territorial zones down even smaller than town-by-town, I'm sure they would. But nevertheless, rating is a combination of the risk you pose as a driver, and the risk posed by the geographic area in which you will do most of your driving. Simple, logical, and fair. I'm not sure if it can be explained in much simpler terms. Don't forget that insurance is a business product-not an entitlement.

Anonymous said...

I'll lose $180, own my home in Waterbury and drive an older car.

Anonymous said...

So buy another car...DUH!

Anonymous said...

DUH, the tax year so over.

Anonymous said...

Maybe we can get Rell to extend that Commuter Rail line to Wtby. Then you could ditch your Yugo.

ctkeith said...

GC,

Please print your RESEARCH to back up your Claims.In order to make your claim you have to assume many facts( like most city dwellers own a car)that aren't facts.I pay about 3800 in property tax and under Rells plan I'll pay 4000.Please don't do me any favors by "eliminating the Auto Tax".

Miss Moody could have wrote your comments in this thread.

Anonymous said...

Yeah, but my insurance will go through the roof.

Genghis Conn said...

Keith:

Obviously I have no time to get the hard numbers, but I think you're making a lot of assumptions here, too. For instance, a lot of city dwellers don't own their own homes. If they don't have a car, either, it's a wash. Those urbanites who own their homes but don't own cars are screwed, true. But by and large, I think this is going to benefit most people.

Er... you have any research to disprove me?

Anonymous said...

Federal budget cuts supported by our Republican delegation will exacerbate CT's budget struggles particularly in education and programs for low-income people, reports AP. Hypocritical of Rob Simmons to express his disappointment in the cuts, given that he voted for them, before voting against them. This DCCC web ad pokes fun at Rob Simmons' flip-flopping on other issues (Windows Media file) - thanks to 2nd District Watch for the news.

Also, here is the Senate Democrats legislative agenda (PDF).

sanity said...

Theft is a claim from a different type of risk that is based on an entirely different set of statistical metrics than liability and collision. There is really no correlation between the risk of theft and the risk liability and collision. They need to be assessed and priced differently.

I understand what your driving at (pun intended). It is easier to classify the risk of liability and collision to the exclusion of geography than it is theft. It can be argued, though, that where those who drive into Hartford to work there is less theft than other parts of the city because the large number of potential witnesses may act as a deterent. Do you narrow down the geographical risk pool to the census tract level or more or expand it out to an entire metropolitan area? I don't know. I don't think there is a perfect formula, but maybe there is a better formula. Your point is well taken.

ctkeith said...

I didn't put Jodi Rells Plan foward as a panacea for her and CT residents GC,You did,so the least you can do is a little research instead of the typically easy Spinning you're famous for.

I own 2 older autos whose combined tax is under $150.My Homeowners tax is about $3650.I consider myself lower middle class economically and if Jodi rells plan becomes law I'll have a $200 increase in my state income tax.

I'm willing to bet every guy who lives in mansion on Lake Ave in Greewich will get a TAX CUT AGAIN if Jodi Rells plan gets Passed while most lower middle class homeowners will get a tax increase.

One more thing,
Many Renters don't feel they pay property Tax but of course it's built into their rent.I believe the Auto Tax is a good Tax because it reminds Renters that they are indeed Taxpayers of the town or city they are living in.

Genghis Conn said...

I didn't put Jodi Rells Plan foward as a panacea for her and CT residents GC,You did

...I did? Wow.

I'm sorry you're getting screwed, Keith, but I still think a lot of people will benefit, and it'll help attract people and companies here. We can disagree on that.

DeanFan84 said...

GC--
You are being too nice to Keith...

Again, my problem with Rell's plan is that you eliminate a tax on those who can afford to pay it.

Anyone with a $30,000-$100,000 car can afford the property taxes on it.

The lost revenues will eventually need to come from somewhere.

I trust that as usual, the Democrats will act with fiscal prudence.

Anonymous said...

I was at the SOTS speech today.

Couldn't see DeStefano from where I was, but Malloy was in site.
He needed CPR -- he turned ghost white... ok, maybe an overstatment.. but he was clearly not happy at Rell's auto tax proposal.

She wins either way. If the plan doesn't go through, Joe Six-Pack will appreciate her effort. If it does pass, she scores big.

Most don't understand the tax credit - it is somewhat hidden. Everyone who pays a car tax (or two) does it by writing a seperate check. Come July 1st, if they have to write a check to their tax collector, they'll remember Rell's proposal.

If they can't register their car because they owe, they will be really P.O.'d.

(I'd like to know the other savings to municipalities by elinating this tax -- printing and mailing thousand's of car tax bills, supplemental bills, assessor's taking questions on car's worth, handling the checks, etc)

There's certainly no doubt the Dems will continue to control both chambers next January. That being said, I'd hate to be a Dem legislator and have to defend a vote against eliminating the car tax!

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