Mayor's Motor Vehicle Tax Increase Rejected in Bipartisan Vote

With election season approaching, the mayor is so eager to lower his mill rate that he tried to convince the Democrats on the Board of Aldermen that raising car taxes on residents would be beneficial—but we didn’t buy it.

The mayor’s office called a special meeting Wednesday night to propose raising the values of all motor vehicles on the 10/1/2024 grand list by 5%. This change, allowed by a recent state bill, is being used by some cities and towns to offset the revenue loss from a previous law passed last year that lowered motor vehicle valuations. The mayor argued that this 5% increase would help lower the mill rate and provide “tax relief.”

However, as Alderman Pacelli (D-Majority Leader) stated, “I believe the real question is where the dollars or tax (revenue) is going to come from for the city to bring in enough money to meet its obligations...you would be taking an expense, a tax, and putting it onto the residents of Milford as a motor vehicle tax...I can’t vote in favor of anything that would put an additional tax increase on the residents of Milford...after a year where we’ve had the highest tax increase in 20 something years in Milford, with probably another pending increase, … I just don’t see that as being a smart move.”

The mayor and Board of Finance have recommended a budget that equates to $228 million in property taxes. This proposal wouldn’t reduce the overall tax burden, but rather shift who pays more. If motor vehicle values rise, vehicle owners will pay more, but if they don’t, residential and commercial property owners will shoulder a higher portion of the tax burden. It seems unfair to burden a smaller group—vehicle owners—when we could spread the cost more evenly across both residents and businesses.

Alderman Willis (D) commented, “A tax increase like this hurts the most vulnerable of our population the most, the people that can afford it the least.”

Alderman Jenkins (R), who supported the proposal, argued, “If I’m that struggling new homeowner…the relief that I am going to get by a lower mill rate on my home is going to be much more substantial in my pocket, as opposed to focusing on just my vehicle,” but when we do the math, homeowners who also own cars won’t see any substantial relief.

For example, if I own a $400,000 home with an assessed value of $280,000, and the mill rate drops by 0.22 mills (as expected with this change), I’d save $62 on property taxes. But if I also own two cars with an original MSRP of $35,000 and $20,000 that are five years old, I’ll pay $73 more in car taxes under this proposal. In total, I’m paying $11 more—a break-even scenario, or worse if I have teenagers with cars.

Not everyone owns a home, so for a resident who only pays car taxes, this proposal would cost $73 more. So, who gets the “substantial savings”? Take United Illuminating for example, with an assessed property value of roughly $34 million last year, the UI would save $7,400—a minimal amount for a company of that size. It’s unfair to charge taxpayers with two cars an extra $73 just to save UI $7,400.

Alderman Federico pointed out the recent $80 million drop in valuation for the mall, which shifts the tax burden from commercial to residential properties. The administration explained that last year’s state law lowered motor vehicle valuations by $67 million, and this proposal would recoup $50 million of that loss, noting “it’s always good news when our grand list increases.” But Alderman Federico responded, “It's good for the city when the grand list grows. But I don't think this is the way to grow it. This is just undoing something that was done at a state level that has the potential to help people who need it.”

Alderman Smith (R) stated this “should be called a tax increase. And I heard someone say earlier that it's regressive. It is regressive. This is on used cars. This is levied on people of middle and moderate income … they're probably gonna have the hardest time paying this tax increase. You know, the state of Connecticut actually did the taxpayers a favor by shifting us over to this new structure. And the taxpayers got a break. What we have in front of us is the opportunity to reverse that tax break and to increase the burden on the taxpayers.”

As the discussion progressed, the mayor pressured the board, visibly shaking his head when he disagreed with their comments, insisting this was a “win-win” and that “when somebody says they don't understand it, I sympathize because to me, it’s clear.” Alderman Federico responded, “I understand and appreciate the time and the work and the effort...but I want to be 100% clear. It is not that we do not understand. It is that we disagree.” Later, the mayor addressed the board, “I don’t know what your thoughts are with this budget, are you going to be proposing cuts to get the mill rate down? ... I'm asking the other side of the aisle, or are you going to look to put more money back into the budget to raise the mill rate?” Again, the tax burden wouldn’t be reduced by this proposed change; it’s merely a shift from one group to another. The mayor clearly just wants a lower mill rate for campaign purposes and is asking the board to do the work he didn’t do by finding savings in the proposed budget. While the board takes budgeting seriously, we are volunteers with day jobs. The mayor should do his day job and work with his department heads to find real savings and foster economic growth for Milford.

The motion failed 9-4 in a bipartisan vote, with all seven Democrats (Beatty, Federico, Healy, Mulrenan, Pacelli, Vetro, Willis) and two Republicans (Fowler, Smith) voting against it. Four Republicans (Bevan, Casey, Jenkins, Marlow) voted in favor.