CHRIS POWELL: What property tax relief? And gasoline overtakes TCI

Published on Monday, 15 November 2021 19:45

Governor Lamont remarked last week that he is thinking about property tax relief, apparently in the context of his campaign for re-election next year. Of course for decades the whole state has been thinking about property tax relief and many politicians have been prattling about it, so where is it?

For the trend of property taxes in Connecticut long has been and remains higher. At best some towns manage to hold their property tax rates steady in an occasional budget year. Then they go up again.

The governor's idea of property tax relief is only a property tax credit against the state income tax, a tax credit that has made occasional appearances over the years when governors have wanted to strike a pose as a state election drew near, a sort of bribe for the voters. But the property tax credit isn't really relief at all, just a replacement of a small amount of local property taxes with revenue from state taxes. The net total of taxes doesn't change, and neither does any town's property tax rate.

When state government's financial circumstances get tighter, the property tax credit is reduced or eliminated.

On balance, this kind of property tax relief has been offset by state tax increases.

Some argue that this tax shifting is an improvement because state government's tax base is much broader than municipal tax bases and so the state can tax the wealthy comprehensively. But for most people the tax shift is a wash and its only real beneficiaries are government's employees and dependents, who get most of the money.

The longstanding failure to achieve property tax relief might seem strange, since every state budget contains appropriations for towns that are lauded as property tax relief. But most of this money is diverted to raising the compensation of unionized municipal government employees, compensation that typically consumes at least two-thirds of municipal budgets.

So there can be no property tax relief until municipalities gain control of their labor costs, and this will remain impossible while state law imposes on municipalities the binding arbitration of municipal employee union contracts.

Real property tax relief would require repealing binding arbitration or at least allowing municipalities to elect the arbiters who set contract terms. It would require towns to hold referendums on municipal property tax increases and a state law imposing a cap on municipal property tax rates.

Most of all it would require the public to wrest control of state and municipal government away from the government employee unions, which control the state's majority political party. That's why no Democratic governor is likely to deliver real property tax relief.

So thinking about property tax relief, as the governor says he is doing, is about as effective as thinking about a ham sandwich when someone else already has eaten it.

* * *

For many months the governor and many Democratic state legislators have been eager to put Connecticut into what they call the Transportation Climate Initiative, or TCI, a regional arrangement to increase wholesale taxes on gasoline in the name of raising money for less-polluting forms of transportation. Advocates of the arrangement said it would not raise gas prices in Connecticut by more than 15 cents per gallon.

But now gas prices are soaring – an increase of $1.34 per gallon or 65% in the last year. The Biden administration has crippled the U.S. energy industry and inflation is raging generally and eroding living standards. So Democrats seem to be losing their enthusiasm for higher gas prices.

Support for the TCI is fading and 11 Democratic U.S. senators, including Connecticut's Richard Blumenthal, last week urged the president to get gas prices down, possibly by releasing oil from the strategic petroleum reserve.

Gas prices particularly and inflation generally are likely to have great influence on next year's state and congressional elections. So with Democrats in charge both in Washington and Hartford, how much of a political price are they willing to pay for their environmental posturing against carbon-based fuels?

Probably not much, in which case they will show that they never really believed what they said about the supposed emergency of climate change. That emergency will turn out to have been less urgent than the next election.

Chris Powell is a columnist for the Journal Inquirer in Manchester.

Posted in The Bristol Press, Column on Monday, 15 November 2021 19:45. Updated: Monday, 15 November 2021 19:47.