Director Peak Goes Green

Good Gas Mileage, More Tax Breaks

Cities And Towns Could Soon Give Exemptions To Residents With Efficient Cars

By REGINE LABOSSIERE|Courant Staff Writer

August 26, 2007

In the spirit of going green, several local officials across the state are pushing for their cities and towns to approve a tax exemption for residents who drive hybrids and conventional vehicles that get at least 40 miles per gallon.

“We believe taxpayers deserve tax relief across the board, but we also want to promote hybrid cars to encourage good environmental policy,” said Matt Peak, a Republican on the Manchester Board of Directors who recently recommended the board review the tax exemption policy.

The push by Peak - and officials in a handful of communities including Vernon and Weston - comes a couple of months after the state legislature approved a plan that allows cities and towns to decide whether to give the tax breaks and to what extent.

“One of the beliefs that we have is that people will consume what’s in their best interest. Hybrids have the best opportunity to change driving patterns. With gas prices going up, there will come a time where hybrids’ fuel consumption just makes economic sense,” Peak said.

The tax break chatter is at a minimum right now because the legislation, which goes into effect Jan. 1, was approved only recently. But interest is expected to grow as more people learn of the opportunity, said Weston First Selectman Woody Bliss, who is promoting the policy in his town.

As chairman of the environmental management committee of the Connecticut Conference of Municipalities, Bliss worked with state legislators to create the bill. He also worked on a similar bill that was proposed but not approved in 2004.

According to the Union of Concerned Scientists, a nonprofit group that researches and develops environmentally friendly policies, more than 40 states in the last several years have enacted or considered laws that give breaks for hybrid cars and have given municipalities similar power.

From California to Arkansas, Montana to Massachusetts, and cities within them, hybrid drivers get tax credits, exemptions, reductions or deductions. In some states, hybrid car drivers can use the carpool lanes without any other passengers, and in some cities, like New Haven, drivers get free or discounted parking.

Each program has its own specifics, such as a set fuel mileage, the amount of the tax exemption or the models of vehicles included.

In Connecticut, any city or town can give a property tax exemption to cars bought between Jan. 1, 2008, and June 30, 2010, that have an estimated city or highway gasoline mileage rating of at least 40 miles per gallon, as determined by the U.S. Environmental Protection Agency. The state will not reimburse the municipalities for the revenue loss. The state already exempts the sales tax on hybrid car purchases.

“The idea is to make it more attractive to residents to buy one, so if you had someone who was on the fence, maybe this would be enough to push them over,” said Jamie Howland, a policy analyst at Environment Northeast, a nonprofit organization.

“The main benefit is that it would encourage people to buy cars that get better fuel mileage. The benefit of that is decreased air emissions and decreased dependency on fossil fuel, on oil,” Howland said.

Vernon Deputy Mayor Jason McCoy, a Republican who is running for mayor, brought up the tax exemption legislation last month as part of his platform. McCoy said his early proposal would give a 10 percent abatement as part of the tax exemption for each of the five years after the vehicle was purchased, used or new.

“We’ve got to start doing things, however small they might be, on the local level in every town, to encourage everybody to make a choice not to use fossil fuels,” McCoy said.

If that doesn’t appeal to drivers, McCoy said, then the idea of having to pay less to the town just might.

“About 75 percent of people don’t like to pay taxes. If they can keep their money and not give it to the government, they would prefer to give it to wherever they’re buying their products from. If this is one step that encourages them to do it, that’s wonderful,” McCoy said.

“I don’t really see what the downside is,” he said.

Bliss agreed that the tax benefit was probably most attractive to people who are considering buying a hybrid.

“I’ve been around for a while, and I’m not naïve to think that people will do it on their own. Some people do,” he said.

Bliss, who says he has green eyes and green skin, drives a Honda Civic hybrid and has driven vehicles with good mileage ratings since the 1970s. He understands that not everyone is quick to jump on environmentally friendly initiatives, such as himself, a member of the Sierra Club and the Connecticut League of Environmental Voters.

“Anything we can do to improve the mileage on cars, conserve gasoline, conserve fuel is a benefit to future generations,” Bliss said. “It’s really important to make it attractive to people.”

Some town officials, however, say there is one major catch: How will cities and towns make up for the loss of revenue from giving the tax breaks?

“Environmentally, it’s terrific. My concern as a local government manager is that we are using the local property tax to accomplish national goals,” said Manchester General Manager Scott Shanley, who along with town staff is researching the legislation. “I think we need to be rewarding people who are using less water, rewarding people who are using fluorescent lights, rewarding people who are using less fuel, rewarding people who are using less heat in the winter time. I just have concerns about shifting that responsibility into the local [tax base].”

According to the town assessor, the number of hybrid cars registered in Manchester has risen from about 25 in 2004 to about 60 in 2006, most of which are the Toyota Prius. In 2006, hybrids accounted for $29,350 in property taxes out of $920,000.

Shanley said that if Manchester’s board of directors were to approve its own version of the tax exemption, the town would not lose a lot of money initially. But he suggested that someone would have to make up the difference.

“My concern is only the principle of the thing, and that is using the local property tax as a tool to achieve social goals,” Shanley said. “Because the local property tax is perceived to be such an unfair tax to begin with, I just think it’s problematic.”

Bliss said he hopes every city and town in Connecticut reviews the tax exemption policy.

“It gives total flexibilities to the town, so it fits into their financial plans,” Bliss said.

Peak, who has promoted environmental initiatives in Manchester during his first term on the board of directors, said he hopes Manchester will discuss and vote on the policy in the next couple of months.

“In the long run, we hope to achieve more hybrid vehicles on the road in Manchester,” Peak said. “Given that automobiles account for such a long degree of pollution … we feel that that’s the best way to impact the environment.”