Land value tax would benefit New London
What do the Fort Trumbull, Neighborhood Envisioning and Reconnecting New London projects and city councilors' new initiatives for home buyers all have in common? And why is it important that our state legislators know about these?
In recent months, New London has been immersed in examining neighborhoods through a series of envisioning sessions. These projects are attracting active citizen participation and yielding defining views of how New Londoners envision improving the city. So far, initiatives include the Neighborhood Envisioning project - addressing a part of the downtown waterfront and adjacent neighborhoods and Reconnecting New London - seeking to re-establish ties along Williams Street and Hodges Square, between downtown and Connecticut College and the Coast Guard Academy.
A similar effort is happening in the Fort Trumbull area - focusing on how best to develop and integrate this area into the larger New London tapestry. Separate but related activity includes two initiatives by city councilors that create financial incentives for individuals buying homes in the city.
The big question arising from all this activity is: How does the City of New London plan to finance the development that comes from the envisioning projects or the City Council initiatives and then how does it sustain these on-going revitalization efforts into the future?
One important way that already exists is for New London to follow through on the state's endorsement for the city to initiate a pilot for property tax reform. This pilot will gradually shift taxation from buildings and other improvements to land.
A petition of more than 90 signatures of New London residents and businesses support the planning of the Land Value Taxation pilot. Supporters know that land value tax or LVT incentivizes home improvement without burdening homeowners with higher taxes. A pilot plan which includes concrete details showing how LVT will help New London is needed, as is some clarification about what Land Value Tax is and is not.
Some facts about Land Value Tax:
• LVT is not another tax. LVT is the reformation of the existing property tax - away from improvements in buildings toward value of land itself.
• LVT does not punish improving property. LVT rewards improvement.
• LVT does not impact non-taxable open-space, wetlands or parks. LVT affects property now taxed.
• LVT does not assess property. LVT is based on decisions of the City Assessor's Office, as is now the case.
• LVT does not determine highest and best use. LVT is carried out within the policies of the city's planning and zoning regimen.
• LVT does not determine the city's budget requirements. LVT is carried out within the city's present regime for development and adoption of annual budget.
• LVT does not supersede resident rights to petition for a budget referendum or individual assessment appeals. LVT upholds owners' property rights to petition, ballot through referendum, and appeal of individual property tax decisions.
While LVT is not a silver bullet it does offer a workable approach to creating a fair, effective and sustainable source of revenue to realize New Londoners' burgeoning visions for a vibrant, re-vitalized city. With an effective LVT program in place, existing tools such as enterprise zones, abatements, grants and loans (when available) can be employed strategically to supplement an LVT program.
In order for New London to proceed with the LVT pilot, we need the state's renewed authorization. Last spring, the City Council requested an extension of the state's deadline for New London to propose a pilot Land Value Tax program to the state for its approval. The city now needs this extension from our state representatives.
To learn more and to encourage our state legislators to support the City Council's request to allow a pilot to proceed, visit www.re-newlondoncouncil.org for information on how you can help.
There's no doubt that as a city we need to incorporate a sustainable element into our plan, if we want to realize the visions that are being generated by these neighborhood discussions. Smart Land Value Tax is just that - a strategic way for the city to use its revenue resources in a sustainable way.
It's time for state legislators to act on city councilors' request to extend the deadline so we can create a LVT pilot for New London.
Kathleen Barrett lives in New London. Fellow New London residents Lorraine E. Allen, Sandy Chalk, Art Costa, Mongi Dhaouadi, Hugh Griffin, Ken Hanson, John Lauderdale, Jerry Sinnamon, Ronna Stuller, and Nat Trumbull endorsed this commentary.