Gov. Malloy: Elimination of Car Tax Not Likely This Year

This article was written by Associate Regional Editor Eileen McNamara.

Gov. Dannel P. Malloy's controversial proposal to eliminate local taxes on cars worth $28,000 and less isn't likely to get enacted this year. 

The plan, broadly opposed by municipal leaders across the state,  failed to make it out of a legislative committee earlier this month and was unpopular as well with groups that lobby on behalf of towns.

According to information provided by the state Office of Fiscal Analysis, if the car tax is eliminated Windsor Locks stands to lose an estimated $5 million. In East Windsor, the town could lose an estimated $2.2 million. Officials in those towns have not said how they would make up for the loss of funding.

In March, East Windsor First Selectwoman Denise Menard said recently that she favored a standard, statewide tax rate applied to all cars, but she disagreed with state Sen. Gary Lebeau’s suggestion that state collect the tax and then give it back to the municipalities.

While Malloy's proposal would cause a loss of millions in Windsor Locks, First Selectman Steve Wawruck said in March that he supports a conversation about taxes and the reliance on property taxes.

In a press briefing on Friday Malloy told reporters that while he thinks the proposal is dead for this year he believes the discussion on the plan was productive and some form of the measure could be raised again in the future, according to the blog Capitol Watch.

Malloy had proposed eliminating local taxes on cars valued at $28,000 and less as a form of middle class tax relief. Although town leaders have argued the tax provides millions of dollars in local revenues, Malloy has countered it's not as lucrative as it seems because it's difficult and costly to collect.  

Town leaders had also argued that once eliminated, the tax would have to be made up by  increasing other local taxes.