Face the Facts: Could Conn.'s car tax be repealed or removed?

Majority Leader Rep. Jason Rojas (D- East Hartford) joins Mike in studio to discuss the infamous car tax, and why repealing it is easier said than done. Lawmakers expect to head into special session to finalize legislation that would change the way vehicles are assessed, among other things.

Mike Hydeck: Connecticut lawmakers have been flirting with getting rid of or amending the car tax literally for decades. Governor Rell tried to, Governor Malloy talked about it. Lawmakers have been talking about it, but proposals on how to achieve that usually hit a roadblock and then nothing happens this time may be different. Some changes are coming. But will it totally be eliminated? House Majority Leader Jason Rojas joins me now, Democrat from East Hartford. Welcome. Good to see you. So let's talk about the House Bill 5172. One of the things that is a peg for it, it would change the way vehicles are assessed, right, it adds depreciation. So if I have 2002 Honda Odyssey, I'm not paying top rate for it because it's been around for a while.

Jason Rojas: Right and prior to was left to the Office of Policy and Management, which is the governor's kind of budget office to make a determination about what the value of a car was based on a recommendation from the National Automobile Association. So instead, we're going to the MSRP, the manufacturer's suggested retail price, and then putting in a depreciation schedule, so that there's some rationality to it, so that towns and the car owner is going to know that the value of that car is gonna go down five percent, five percent, five percent, every year until the age of the car reaches 20 years.

Mike Hydeck: So that helps mitigate one concern. What about mill rates that fluctuate so significantly? If I have a Honda Civic in Hartford and that same Honda Civic in Greenwich, and likely, If I'm living in Greenwich, I could afford the tax? I mean, is there a way to make that more fair?

Jason Rojas: Yeah, it addresses that a little bit, right. So we put in a car tax cap to try to deal with the inequity of that, so that if there's a community with a relatively higher mill rate, right now, the cap is set at 32.46 mills. So any community that has a mill rate higher than that, the car tax is capped for the people who live in those communities and the state provides a reimbursement to the towns and cities. Part of the challenge with getting rid of the car tax is, it's a billion dollars worth of revenue to towns and cities. We could say, 'well just cut spending.' Well, that is going to be education, that is going to be fire services, police services, snow cleanup, so it's not as easy. As much as we all would like to get rid of the car tax, it's much easier said than done because of that one question. Or if we get rid of it, well just put it onto homes. Well, that's going to increase the cost of living in a home, or it's going to increase the cost of rent.

Mike Hydeck: So that leads me to my next question, because after 5172 went through and got bipartisan support, the Senate came back and said, 'Hey, let's just eliminate the whole car tax over five years.' And do you see that as likely?

Jason Rojas: No. Well, we're gonna make it an option. So what that amendment to the bill wanted to do was just listen, if towns want to do this, go ahead and do it, and then figure out a way to make up for that revenue in a different way. I think it's a legitimate goal that we all have. I was on that amendment. I don't know that it should have went on this bill necessarily, could have been on another bill, given that it had already passed the House, which is why we didn't end up re passing it and why we have to come back in a special session to address this.

Mike Hydeck: Right. That's what I was gonna say. Special session is likely, right? You need to do it like, soon.

Jason Rojas: This month. In the month of June, we will go back into a special session to address this issue. And we have to, because towns and cities have to begin preparing for the next budget cycle. And they have to have all the information they need about what the value of a car is, how much tax it's going to produce, because then they need to submit that information for October one, so that it can build a following year budget. So this is very policy wonkish, technical, that the average car owner has no idea is happening. But it's really important in terms of how we administer that tax, and how towns are able to collect on it.

Mike Hydeck: Well, and cities and towns are like, 'Whoa, we're gonna get rid of hundreds, you know, or millions or billions of dollars.'

Jason Rojas: A billion dollars, across 169 towns. So, obviously less of an impact in some communities, far more significant impact in others, but in particular for the business community, it would have a lot of impact on businesses that have vehicles.

Mike Hydeck: And CBIA, Connecticut Business Industry Association, was concerned if you are a single proprietor, you own a business, whether it's like, you know, a hair cutting shop, and you use your car for both work and home use, is that going to be something that's addressed as well?

Jason Rojas: Right, because that vehicle, under the law, it changes so that it became personal property and wasn't subject to the car tax anymore. So in communities where that car tax cap existed, that car in that community is now personal property and taxed at the full rate, not at that lower mill rate. So anybody who owns a business and has a vehicle in that community would be significantly impacted. And what's that going to cause them to do? They might move to another community with a lower mill rate, which is not something we want to encourage.

Mike Hydeck: And so CBIA says, 'look, we've got to take care of this.' That'll be taken care of in the special session too, you think?

Jason Rojas: That's right. It's all part of the same bill.

Mike Hydeck: Has there been any pushback when you start talking about getting rid of the car taxes? If you talk to a local mayor or a first selectman, they say, how are we going to do this? We can't raise, so what's what's the solution? How do you discuss the solution moving forward? You just leave it up to the towns like 'hey, Hartford, if you want to jack up your property tax rates, that's up to you.'

Jason Rojas: That's what we're left with, right? Because we don't have a viable alternative to filling that revenue gap that towns and cities rely on so much. There are some things that we can do. There's nothing that can be done in the short term or quickly or easy, that would help address this issue.

Mike Hydeck: Do you foresee within the next few years of actually getting rid of it? Is there a way? It seems so difficult. And why does everybody bring it up if it is?

Jason Rojas: Because you know, who doesn't want to get rid of a fairly regressive tax? An annoying tax, right? I bought my car. I need it to go to work. I need it to bring my kids to practice and I got to pay a tax on it? There's a legitimate desire and rationale for getting rid of it. It's just there's another side to the ledger that has to be considered in this conversation.

Mike Hydeck: Do we have a date for the special session? I guess the Governor has to call it right?

Jason Rojas: The speaker, senate president and the governor are all working on trying to figure out a date. Part of the challenge of being a part time legislature is, we all went back to our lives. We all went back to work. We have vacation scheduled. We have to make sure that we can have enough people present to actually take a vote.

Mike Hydeck: And all of a sudden you're like we've been out of session for less than a month. And we're already scheduled to go back.

Jason Rojas: Two weeks. But that happens, right? And we're legislators, we have to come back in and do the people's work. And this is one of those things that just has to happen.

Mike Hydeck: Majority Leader Rojas, good to have you. Thanks for joining us on Face the Facts.

Jason Rojas: Thanks for having me.