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Connecticut Tax Collectors’ Association 2017 Legislative Summary

Detailed analysis of legislative changes impacting Connecticut's tax system. Includes budget adjustments, property tax grants, car tax elimination, aid adjustments, appeals, out-of-state registration, regionalization, and rebate programs.

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Connecticut Tax Collectors’ Association 2017 Legislative Summary

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  1. CT Tax Collectors’ Association2017 Legislative Summary Capitol Consulting LLC Mike Dugan Capitol Consulting LLC November 9, 2017

  2. Topics • The Perfect Storm • Issues in the State Budget • Issues from the Regular Session • A Look Forward to 2018 Capitol Consulting LLC

  3. Connecticut’s Perfect Storm • Why did it take 123-days into the Fiscal Year to adopt a budget? • Lame Duck Governor • Historically Low Approval Ratings • 18 to 18 Senate • 79 D’s to 72 R’s House • $3.5 Billion Deficit Capitol Consulting LLC

  4. Changes in Budget Capitol Consulting LLC SB 1502 (PA 17-2 from the June Special Session) – An Act Concerning the State Budget for the Biennium Ending June 30, 2019

  5. MV Mill Rate Cap • Sections 699 & 700 of SB 1502 (Effective Upon Passage) • Raises the MV mill rate cap from 32 to 39 mills for 2016 assessment year • Raises the cap to 45 mills for the 2017 assessment year and thereafter • If the MV mill rate were set before the bill’s effective date, the budget allows towns by a vote of their legislative body to revise their MV mill rates for 2016 assessment year • Revision votes need to be made by Dec. 15, 2017 Capitol Consulting LLC

  6. MV Property Tax Grants • Section 21 of SB 1503 (Effective Upon Passage) • In FY 18, allows certain municipalities that had a mill rate of more than 39 mills in FY 17 to apply to OPM for a supplemental MV property tax grant. • To qualify for the grants municipalities must have implemented a real property revaluation in 2014 and 2015 assessment years and its mill rate must have increased by at least 4 mills over the previous year. • OPM may provide grants within available appropriations. Capitol Consulting LLC

  7. Eliminate the Car Tax • Now You See It. Now You Don’t. • Original Compromise Budget • Cap the MV tax at 39 mills in the first year • Eliminate MV tax in the second year • $700 to $800 million lose to municipalities • Municipalities would need to cut spending or increase the real property tax to make up the revenue loss • “Nuisance tax” “Good policy” “Trade off” Capitol Consulting LLC

  8. Tax Adjustments Due to Increased Aid • Section 20 & 28 of SB 1503 (Effective Upon Passage) • Permits municipalities and regional boards of education that adopted a budget or levied tax for FY18 before the state adopted the budget to change their budget and taxes if the state’s budget provides over $100,000 more in state aid than projected • By February 1, 2018, municipalities and boards must adjust tax levies and any remaining installments. And allows municipalities to issue tax refunds or rebates for excess taxes paid. • Municipalities that collect taxes in a single installment may issue supplemental installments reflecting changes in the MV mill rate cap in the budget Capitol Consulting LLC

  9. Board of Assessment Appeals • Section 699 of SB 1502 (Effective Upon Passage) • For towns that have already issued MV property tax bills the budget requires the Board of Assessment Appeals to hear motor vehicle property tax appeals for the October 1, 2016 assessment year by Dec. 15, 2017 Capitol Consulting LLC

  10. Taxing of Out-of-State Registration • Section 556 of SB 1502 (Effective Upon Passage) • Establishes procedures where assessors will work with DMV to identify MV registration in other states to add them to a municipalities grand list • Requires municipalities to remit one percent of the property tax collected on these MV to the Special Transportation Fund to offset the administrative costs • Background • CGS 12-71(f)(3) – A MV owner is liable for property taxes in CT if the MV during the normal course of operation, most frequently leaves from, returns to or remains in CT. Capitol Consulting LLC

  11. Regionalization • Section 110 of SB 1502 (Effective Upon Passage) • Authorizes the sharing of tax assessors • Permits the Council of Government or two or more municipalities to jointly appoint a shared tax assessor • This doesn’t apply to tax collectors . . . . yet Capitol Consulting LLC

  12. Renters’ Rebate Program • Section 23-26 of SB 1503 (Effective Upon Passage) • OPM is responsible for the administration of the program. • It requires municipalities to bear half the cost of the program up to $250,000/year • OPM must prepare a list of approved rebates by 11/30/17 • Background on Renters’ Rebate Program • Provides a reimbursement to renters who are elderly or totally disabled and whose income does not exceed certain limits • Rebates are graduated • Renters submit applications to local assessors or their agents between April 1 and October 1 for preceding calendar year Capitol Consulting LLC

  13. Elderly Circuit Breaker Program • Section 206 of SB 1502 (Effective Upon Passage) • Authorizes OPM to reduce by up to 100% reimbursements to municipalities for the Elderly Circuit Breaker Program. • OPM can only do so if the municipality is not a distressed municipality, targeted community, enterprise zone or municipality within an airport development zone • Background • Elderly Circuit Breaker Program provides tax relief to low-income elderly or disabled homeowners Capitol Consulting LLC

  14. Crumbling Foundation • Sections 334 - 348 of SB 1502 (Effective Upon Passage) • Provides the framework to assist owners of one to four family dwellings including condos with damage from crumbling concrete foundations • $100 million in bonding over 5 years • Creates a not-for-profit captive insurance company to help homeowners • Requires legislative hearings annually • Credit program to help homeowners find additional funding • Requires municipalities to waive application & permit fees Capitol Consulting LLC

  15. Legislation of Interest Capitol Consulting LLC

  16. SB 799 – Interest Rates on Liens • Introduced by the Banking Committee (again) • Sought to reduce the interest rate from 18% to 6% on municipal tax liens • William Donlin testified at a March 2nd public hearing stating, lien assignments are beneficial to the residents allowing them to stay in the homes without the threat of foreclosure while paying of their lien. The alternative to lien assignments is foreclosure. • Following the hearing the Banking Committee took no action Capitol Consulting LLC

  17. HB 7142 – Interest on Lien Assignments • Introduced by the Banking Committee • The bill sought to impose a floor on property tax, water and sewer liens as well as put new restrictions on entities that purchase liens • This bill was approved by the Banking on a 17 to 2 vote • The House referred the bill to the Planning & Development Committee where we work to have the bill held Capitol Consulting LLC

  18. HB 7322 – Revenue Bill • This was the original Revenue Package introduced by the Finance Committee • Sections 7-10 – Regional Collaboration • Requires the CT Advisory Commission on Intergovernmental Relations to make recommendations to OPM on the consolidation of 19 areas of municipal government that could be regionalized. Including tax collection and assessor services • Following an April 25th public hearing the Finance Committee did not act on this legislation when the budget deal failed in committee Capitol Consulting LLC

  19. Posting of Legal Notice on Website • HB 6674, HB 6930, HB 7249, SB 240 & SB 1037 • Permit the posting of legal notice on towns website in lieu of or in addition to printing in a daily newspapers • Posting of a brief notice in the newspaper directing the public to the towns website for more information • Supported by CCM, COST, most municipal offices and associations • Opposed by the newspapers association • All proposed failed to be voted on my various committees Capitol Consulting LLC

  20. DMV Recommendations • Section 5 of SB 850 (Effective July 1, 2017) • Specifies that municipalities may charge a $5 convenience fee for processing license renewals and registration transactions • Under current law the DMV commissioner may authorize municipalities to process certain DMV transactions. Capitol Consulting LLC

  21. 2018 Capitol Consulting LLC

  22. A Look Forward into 2018 • Short Session Feb. 7th – May 2nd • Gubernatorial Election Year • Majorities Up for Grab in State Senate and State House • Another Multi-Billion Dollar Budget Deficit on Horizon Capitol Consulting LLC

  23. 2018 Gubernatorial Election Democrats Republicans Toni Boucher Mark Boughton Tim Herbst Mark Lauretti Peter Lumaj Steve Obsitnik Prasad Srinivasan Joe Visconti David Walker • Sean Connelly • Dan Drew • Joe Ganim • Jonathan Harris Capitol Consulting LLC

  24. 2018 Game Changers? Democrats Republicans Themis Klarides Erin Stewart John McKinney Tom Foley • Nancy Wyman • Toni Harp Capitol Consulting LLC

  25. General Assembly State House State Senate Even Split 18 to 18 • 79 Democrats • 72 Republicans Capitol Consulting LLC

  26. Questions? Capitol Consulting LLC

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