Hartford Mayor Pedro Segarra’s budget proposal to increase the city’s tax rate by 2.3 mills will discourage private sector investment in commercial development and exacerbate “an already untenable burden on small business owners who purchase equipment and vehicles,” said MetroHartford Alliance CEO Oz Griebel.
Griebel’s warning came in a strongly worded letter recently sent to Segarra, following the mayor’s fiscal 2014-15 budget plan that aims to close a projected $44 million deficit with a mix of tax increases and budget cuts.
In the letter, Griebel credited Segarra for reining in city spending in recent years, but said the mayor has failed to “take meaningful strategic action” to fix Hartford’s highest-in-the-state tax rate of 74.29 mills. That rate is at least 30 mills higher than any of Hartford’s neighboring cities or towns, posing serious challenges for new development and business growth.
The mill rate is the tax levied per $1,000 of assessed value on a property.
“The proposed mill rate increase will send yet another negative signal to private developers as well as to the city’s major commercial property owners, apartment owners, small businesses and homeowners,” Griebel said in his letter.
Griebel urged Segarra and the city council to increase the residential assessment ratio as a means to prevent a mill rate increase. It was a similar recommendation made by a city tax task force earlier this year, which was appointed by the mayor to develop ways to make Hartford’s property tax more economically competitive.
For years, Hartford’s business community has complained that it’s paying a disproportionate share of property taxes. Past delays in revaluations threw Hartford’s property tax system out of whack. State law mandates that both residential and commercial property be assessed at 70 percent of its market value. But in Hartford, residential property is assessed at about 30 percent of value while commercial property is assessed at 70 percent of value.
Griebel said the city should raise the residential assessment ratio to 33 percent next fiscal year to avoid a mill rate increase. That would mean homeowners foot a higher tax bill.
— Greg Bordonaro
