Hartford Business Journal

20 Hartford Business Journal • February 16, 2015 www.HartfordBusiness.com OpiniOn & Commentary editorial Regional property tax system worth considering O f all the property tax reform ideas being kicked around in the state legislature, one of the most intriguing is creating a regional property tax system for new developments. The concept is broadly outlined in Senate Bill 1, which has been introduced by Senate President Pro Temp Martin Looney (D-New Haven) and Senate Majority Leader Bob Duff (D-Norwalk). While it's not fully fleshed out, the underlying proposal would force cities and towns to share property tax revenues generated from a new development like a retail center or minor league ballpark. Although the concept of sharing is foreign to Connecticut, it may be one of the answers to ensuring greater economic prosperity for the state as a whole. A key issue Connecticut faces is cities and towns always competing for new developments so they can fortify their grand lists and, in turn, reduce the property tax burden on their own residents and businesses. The Rock Cats' minor ballpark situ- ation is a perfect example. The team's move from New Britain to Hartford cre- ates a potential win-lose scenario. Once the Rock Cats officially move to Hartford in 2016, New Britain will lose a taxpayer and a community draw. Meanwhile, Hartford is not only getting the ballpark but a potential mixed-use residential- retail-office development valued at around $350 million. While the project is no sure bet for the Capital City, such a large-scale development would have likely never been considered in New Britain if the Rock Cats stayed in the Hardware City. If the Downtown North project works out, the state will be better off as a whole with the team in Hartford because it creates a larger economic impact. Right now, New Britain is the loser in the deal, but a regional tax system could change that, or at least soften the blow. A regional tax system would encourage municipal planners to focus on generating the greatest amount of economic activity from a single project, rather than simply making sure the development ends up in their own backyard. It's a fundamentally different way of thinking and it could minimize the need for cities and towns to offer developers copious amounts of tax breaks or incentives simply to lure away a project from a neighboring municipality. Of course, the devil is always in the details, and we'd need to see a fully developed proposal before we can offer our stamp of approval. There are plenty of potential landmines and pitfalls that need to be considered. For example, a regional property tax could encourage certain municipalities to let other cities or towns do the heavy lifting on economic development while still sharing in the tax revenue spoils. Communities that make smart infrastructure investments to encourage devel- opment within their borders could be punished if they have to share tax revenues generated from future projects. Conjuring up bipartisan, or even partisan support for any meaningful regionalism/property tax reform will be no easy task. It's unclear whether state legislators have the intellectual heft or political savvy to get anything done. Any proposed changes to the current system will never satisfy everyone. But if Connecticut doesn't figure out ways to lessen its property tax burden, and grow its tax base, the state will not be able to maximize its jobs and economic opportunities, and investment dollars will continue to flow elsewhere. n otHer VoiCeS A hint falls with snow By Chris Powell G overnment in Connecticut does one thing well: snowplowing. While 2 inches of snow can send Washing- ton, D.C., into comic panic and paralysis, Connecticut plays through even a foot or more of snow and can push it out of the way and be back in business in 24 hours. Still, even in normal winters the snow is a drag here, and now, with heavy snow seeming to come nearly every week, it is more than a drag. It may be reducing econom- ic output by 10 or 20 percent. Many people feel as if they are going to work mainly so they can earn money to pay someone to plow their driveway so they can go to work again. Of course Connecticut long has managed despite having three terrible months each year. But that is because the state offered advantages offsetting that disadvantage. On the whole for the last 25 years, since its enactment of an income tax, Connecti- cut has been losing population relative to the rest of the country, and the other day the Census Bureau reported that the state's population is back in absolute numerical decline as well. Reflecting recently on state govern- ment's continuing budget deficits despite a record tax increase, budget director Ben Barnes said Connecticut has entered "a period of permanent fiscal crisis." His candor could be appreciated but Barnes also was confessing failure — confessing that state government's policies have not been making Connecticut more prosper- ous but rather have been impoverishing it. The excessive snow will make many state residents reconsider their premises for living here. To encourage them to stay put, state government better start recon- sidering some of its premises as well. HartfordBuSineSS.Com Poll Is hiring a nonviolent ex-convict a good idea? ● Yes, as long as they are productive ● No, it's too risky To vote, go online to HartfordBusiness.com. Last week's poll results: Is a statewide mill rate for motor vehicle taxes smart policy? 44.2% Yes 55.8% No Timid Republicans Leaders of the Republican minority in the General Assembly recently made a show of their desire to get Governor Mal- loy to listen to their ideas for reducing the state budget deficit. They even induced the governor to have lunch with them in the caf- eteria of the Legislative Office Building so they might be photographed. At lunch the governor invited Republi- cans to put their bud ge t - c ut t i n g ideas in writing and send them along to him. But the Republican leaders don't want to do that. Rather, they say they want to be included in confidential negotiations on the budget with the governor and the leaders of the legislature's Dem- ocratic major- ity, because, the Republican leaders say, such confidential- ity has more success with budget cutting. Actually, such confidentiality succeeds most in providing the Republicans with political cover for any serious spending reductions that they might support publicly only if the Democrats shared responsibility. As theirs is the party of government's ever-increasing dependents, many Demo- crats are fairly candid about never wanting to economize seriously. But while Republi- cans pose as the party of financial restraint, mostly they just complain about excessive spending without ever specifying anything substantial that should be sacrificed or any expensive policy that should be changed, lest they offend some special interest, espe- cially the govern- ment employee unions, which could hardly be more supportive of the Democrats but still manage to intimidate the Republicans out of relevance anyway. Malloy was right to tell the Republicans to mail it in. But they will put on paper little for which they could be held account- able. Controlling spending and alienating government's dependents will be entirely the governor's problem when he proposes his budget in a few days. Of course he'll get no help from his own party either. n Chris Powell is managing editor of the Journal Inquirer in Manchester. Chris Powell ▶ ▶ … while Republicans pose as the party of financial restraint, mostly they just complain about excessive spending without ever specifying anything substantial that should be sacrificed … ▶ ▶ It's unclear whether state legislators have the intellectual heft or political savvy to get any meaningful regionalism or property tax reform through the General Assembly. Send Us Your Letters The Hartford Business Journal welcomes letters to the editor and guest commentaries for our opinion pages. Electronic submissions are preferred and welcome at: editor@HartfordBusiness.com. Or you may fax submissions to Editor, Hartford Business Journal, at (860) 570-2493.

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