A proposal to repeal the state law that blocks people and businesses from renewing motor vehicle registrations if they owe outstanding taxes or parking tickets has caused consternation across the state. The feeling is mutual among local tax collectors.
“It’s a bad, bad, bad idea,” Beacon Falls Tax Collector Mary Anne Holloway said. “It would be a substantial revenue loss for the town of Beacon Falls.”
Currently, state law blocks people and businesses from renewing motor vehicle registrations if they owe outstanding taxes or parking tickets to any of the state’s 169 municipalities. Under Gov. Dannel Malloy’s new proposal, this law would be repealed as part of legislation to streamline operations at the Department of Motor Vehicles so customers spend less time waiting in lines at the agency’s overburdened offices.
Naugatuck Tax Collector Jim Goggin said the law is currently the best way the borough has of collecting taxes owed on motor vehicles.
“If we are going to have car taxes we have to have a means to collect it. By requiring people to pay when they register their cars, it gets done,” Goggin said.
Holloway said the law is one of the most reliable methods that Beacon Falls has for collecting motor vehicle taxes.
“If they take that away from us it would be harder to collect money. People would have no reason to pay us,” Holloway said. “A lot of people will register vehicles and forget about our end of it.”
Prospect Tax Collector Diane Lauber said that the opposition to this proposal is statewide.
“Tax collectors as a whole don’t want to go along with this. It is the single most effective collection tool we have,” Lauber said. “If the legislature were to approve what the governor is proposing we would lose that tool.”
Goggin said doing away with the law would significantly impact Naugatuck. The borough collected approximately $8.9 million in vehicle taxes in 2014, according to Goggin.
“We believe that right now 95 percent of people will pay taxes on time. The other 5 percent we get because they have to pay when they register their vehicle,” Goggin said.
Goggin said the borough would be looking at a loss of $500,000, which he felt was a conservative estimate. He said the loss would have a real impact on the borough’s budget.
“It’s five police officers. It’s eight teachers. That’s the type of things that would be gone,” Goggin said.
Goggin said Naugatuck would stand to lose a lot of money because it has significant number of rental properties and a transient population. He assumes everyone is willing to pay their car taxes, but when they move they might forget or might not think they still owe taxes to the borough. The current law ensures each municipality receives what it owes, Goggin said.
Although she did not have an exact figure, Holloway estimated the proposed change would cost Beacon Falls more than $100,000.
Holloway said the only way for the town to recuperate back taxes on motor vehicles would be to send out a state marshal.
Lauber said towns might lose out because the taxes would no longer be a priority for residents.
“People tend to pay their bills based on what they have available to make payments. Generally anybody would pay what’s most important and necessary before anything else,” Lauber said. “People may decide to put off their motor vehicle taxes to later a date or never if something is more important.”
Lauber said allowing people to register vehicles without paying the taxes they owe is almost rewarding bad behavior.
“If this goes into effect, the governor would be rewarding people for not taking responsibility for owning a motor vehicle,” Lauber said.
The Republican-American contributed to this article.