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New London puts off tax-reform decision

By Kathleen Edgecomb

Publication: The Day

Published 02/12/2010 12:00 AM
Updated 02/12/2010 01:31 AM
City seeks extension from state on pilot program

New London - The City Council will ask for a six-month extension to continue studying a tax-reform program that shifts real estate values from buildings to land.

During an hourlong special meeting Monday, the council voted 4-2 to seek an extension from the state legislature on a proposed Land Value Tax pilot program.

"I support exploring it,'' said Mayor Rob Pero. "We were the first city, the poster child, to look into this for the state. I don't think we were given enough time. I feel we're rushing here.''

Last fall the state passed special legislation giving the city the authority to appoint a Land Value Tax Committee to study LVT, which emphasizes taxes on land rather than buildings, and possibly adopt a pilot program that would be the first of its kind in the state.

The committee, which began meeting weekly in October, researched and reviewed four possible models. In a 5-4 vote last month, the committee opted to stay with the status quo. But a minority report recommended the city implement LVT in a portion of the city's downtown.

Under the statute, the city had until Dec. 31 to act on a proposed pilot program. The committee studying the concept missed the deadline and has asked for, but has not yet been granted, an extension.

The council accepted the information from the committee and forwarded it to its administration committee for further review.

Shifting the burden

A land-value tax is supposed to shift the tax burden to the land and not penalize property owners for improving their buildings. Supporters believe the system would help reduce blight and encourage development of brownfields and vacant lots, in part because improvements to the physical condition of buildings would not lead directly to higher taxes.

Pero, Deputy Mayor Adam Sprecace and Councilors John Russell and Michael Passero voted for the extension. Councilors Wade Hyslop and Martin Olsen voted against it. Councilor Michael Buscetto III attended the meeting but had to leave before the vote.

"I have tremendous reservations about this,'' Olsen said. "I'm nervous regarding New London being used as a pilot program.''

Passero also added that the city should have more time to educate the public on land-value taxation.

"There hasn't been enough time to inform the citizens of what LVT would do for them," he said.

At a public hearing Tuesday, 16 people spoke in favor of implementing some kind of LVT program and seven spoke against.

The minority report also recommended a program to educate the public on the impact of land-value taxation.

But the majority report said large apartment buildings, larger shopping centers and car dealerships would be negatively affected by LVT.

" I think we still very much have an opportunity to work on LVT and keep honing it,'' said Art Costa, a member of the committee who recommended the city go forward with the new tax policy for downtown only.

"I think we are moving in a forward position."

k.edgecomb@theday.com

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