A city task force has proposed a fix to Hartford’s broken property tax system that gradually increases the residential assessment ratio over 20-plus years so homeowners and businesses pay a more equal share of taxes.
While not perfect, the recommendations are a step in the right direction and we urge the mayor, city council, and state legislature to back them.
For years, Hartford’s business community has complained it’s paying a disproportionate share of property taxes, and the inequity is sapping economic vitality from the Capital City.
These aren’t unfounded complaints by greedy business owners looking to make an extra buck. Past delays in revaluations threw Hartford’s property tax system out of whack, forcing commercial property owners to shoulder a larger tax burden.
State law mandates that both residential and commercial property be assessed at 70 percent of its market value. But in Hartford, residential property for years has been assessed at about 30 percent of value, while commercial property is assessed at 70 percent of value.
Add in the city’s highest-in-the-state mill rate of 74.2 mills and you can see why very little development occurs in Hartford without government incentives or tax breaks. Developers simply can’t get a return on investment that makes financial sense.
Over the past 30-plus years, the city has sought state legislative approval on several occasions to amend its system to prevent a massive tax increase for residential property owners. Allowing residential properties to be assessed at around 30 percent of market value was one of those changes.
Last year, Mayor Pedro Segarra and City Council President Shawn T. Wooden wisely created a task force to develop recommendations on how to repair the property tax system. The task force, which included representation from business, union, and other interests, submitted its plan last week.
The main proposal is to increase the residential assessment ratio (RAR) by 1 percentage point per year for 20 years, and then by 2 percentage points per year thereafter until the ratio hits 70 percent. That would eventually put Hartford’s property tax structure in line with the rest of Connecticut’s municipalities.
We’d like to see the RAR back to 70 percent sooner, but the prolonged timetable represents a solid compromise that takes into account the needs of both home and commercial property owners.
The end goal of any property tax changes, of course, is to grow the city’s grand list, lower the mill rate, and broaden the tax base. That’s difficult to do under the current system, which has placed Hartford at a competitive disadvantage and contributed to high commercial and retail vacancy rates over the years.
The mayor and city council will also have to control spending, which they’ve done recently.
Yes, a new development wave in Hartford is underway, including new apartment construction and build out of the Front Street Entertainment District, but it is being subsidized by the state and city government, either through tax breaks or direct investment.
For Hartford to truly recapture economic vibrancy, free flowing private investment will be needed. Adopting a more competitive property tax structure is an important step to make that happen.
