Attack of the Municipal Leeches: Connecticut Mayors Clamor for a Tax Increase

James Bailey Brislin
The Carpet City Chronicle

The Enfield Press, June 12, 2008

“In this world nothing can be said to be certain, except death and taxes.“
—Benjamin Franklin

Today, the Connecticut General Assembly meets in special session to decide whether to increase taxes on property owners. Under consideration is an increase to a tax called, “the real estate conveyance tax”.

The real estate conveyance tax is a hidden property tax paid at closing. When it was established in the 1960’s, it was set at 0.11%. Proceeds from the real estate conveyance tax fund the coffers of cities and towns. It was initially instituted to pay for the administrative costs associated with the sale of property: the labour and computer systems involved in keeping land records.

During the state budget crisis of 2003, the state legislature temporarily increased the conveyance tax by 0.25% to fund shortfalls in the budgets of cities and towns. In addition, eighteen urban municipalities were given the option to increase it by and additional 0.25%. The conveyance tax was scheduled to sunset after one year. In subsequent sessions, the legislature has extended the conveyance tax.

This year, the extension of the conveyance tax increase was caught in the inaction of this spring’s “do-nothing” legislative session. Consequently, legislative Democrats have scheduled a special session to deal exclusively with the conveyance tax increase.

According to the real estate website zillow.com, the median home price in Enfield is $208,114. Thus, the 0.25% conveyance tax increase adds $520 to closing costs on a home selling for $208,114.

Championing the extension of the conveyance tax increase is CCM, the Connecticut Conference of Municipalities. Representing the interests of Mayors and First Selectmen from across Connecticut, CCM is aptly nicknamed the Conference of Crying Mayors.

Connecticut’s mayors became reliant on increased conveyance tax revenue and made no plans to deal with the sunsetting of the conveyance tax increase. Many of these mayors have never heard of austerity and do not practice fiscal responsibility. They preside over towns with pending budget increases of 8%-12%, not Enfield’s 0% increase. Unwilling to make budget cuts, they are clamoring for a state bailout and threatening to fund shortfalls with property tax increases.

The time has come to eliminate the conveyance tax increase. With the collapse of the real estate bubble, Connecticut now faces declining home prices. Many homeowners have been caught with underwater mortgages- owing more money to the bank than their house is worth. The extension of the conveyance tax increase will depress home prices, adding the distress of homeowners and further eroding the tax base. It is trading short-term gain for long-term loss to the cities and towns. Once the property tax base has eroded, the municipal leeches will return to the statehouse, led by CCM, to beg for yet another state bailout.

Standing up for the common man are the legislative Republicans and the Connecticut Association of Realtors. They recognize that these municipal leeches want to have their cake and eat it too- they want to expand Big Government and not face the consequences of a regular property tax increase.

The struggle over the conveyance tax further illustrates the skill with which Connecticut politicians break promises to sunset temporary taxes. It echoes a false promise made in 1991: that the state income tax would likewise be a temporary tax. Is it any wonder that faith in government has reached record lows?

This has been the year of the do-nothing legislature. It has responded to the major issues of the day by doing nothing. On the three strikes law, reform of DOT, and reducing anticipated budget deficits, its response has been to do nothing. The inaction is so pathetic that the extension or elimination of the conveyance tax increase will be this year’s most significant legislative action.

This inability to legislate very vividly illustrates the effectiveness of the democratic “super-majority”. It shows why we need to replace Enfield’s do-nothing Democratic representatives with Republicans in November.

 

Author Note: Due to the time-sensitive nature of its content, this column is being run early on the internet.