New tax idea draws supporters, foes to NL hearing

New London - Despite a committee recommendation that the city not participate in a land value tax pilot program, twice as many people spoke in favor of the program as against it during a three-hour hearing Monday at City Hall.

"Large and small cities are the future. If we're ready to step up to build a resilient city, we should do this,'' said Art Costa, a member of the Land Value Tax Committee and one of 16 people who spoke in favor of the new program.

"It's not a silver bullet,'' he said. "Our problem is systematic and only a systematic solution will fix it."

The Land Value Tax Committee, appointed by the City Council with oversight by the state Office of Policy and Management, spent three months researching and reviewing four possible models for the city to adopt a new tax system based on assessing land rather than buildings.

In a 5-to-4 vote last month the committee opted to stay with the status quo.

A land value tax, or LVT, is supposed to shift the tax burden to the land and not penalize property owners for improving their buildings. Supporters believe the system would help reduce blight and encourage development of brownfields and vacant lots, in part because improvements to the physical condition of buildings would not lead directly to higher taxes.

William Cornish, who lives in the city and owns property downtown, was one of seven who spoke against the proposal. Others included Adam Wronowski of Cross Sound Ferry, Murray Renshaw, a local businessman, and an assessor from Windham whose parents live in New London.

Cornish argued that the city does not need a new taxing program to get rid of blight and attract economic development; it needs to address the dozen to 20 buildings in the city with absentee landlords who have let their buildings fall apart.

"You can't tax us into development if there's no customers,'' he said. "You need to put teeth into a blight ordinance.''

LVT, he said, shifts the tax burden so that less people pay the most taxes.

"It's social engineering,'' he said. "It doesn't belong in New London and it doesn't belong in America."

Those who spoke in favor of it included David Bingham of Salem, a representative of the Southeastern Connecticut Sierra Club. He praised the new tax program as a way to encourage dense development in the city and curb sprawl.

"This is an opportunity for New London to do something big,'' he said. "We want New London to prosper. We don't want thousands fleeing the city."

The City Council is expected to vote on the proposal at a future meeting. If the program is adopted, New London would be the only municipality in the state with land based taxes.

A minority report by the committee has recommended the city implement a pilot program only in a portion of downtown. It also recommended a program to educate the public on the impact of land-value taxation.

But the majority report said large apartment buildings, larger shopping centers and car dealerships would be impacted negatively by LVT.

"Under a majority of the LVT models, the top 250 properties whose taxes would increase are already being put toward uses (commercial or otherwise) that seem to maximize the properties,'' the report states. "The effect of having their taxes increase in order to implement LVT seemed counter-productive."

The committee determined that the city has too many unique parcels and businesses to benefit from any impact that LVT may have.

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