Connecticut Passes Taxing Urban Land
|October 29, 2013||Posted by Staff under Campaigns|
This 2013 excerpt of Commons Magazine (probably July) is by Joshua Vincent.
Connecticut’s new law would allow struggling cities like Bridgeport to use property taxes to revive their inner city neighborhoods.
Land Value Taxation (LVT) recognizes the role of community commons such sewers and other public services in adding value to urban sites.
On June 20, 2013, Connecticut Governor Dannel Malloy signed into law an act permitting – as a pilot program – a tax reform that turns traditional taxation on its head, as it also embraces the idea of the commons as a resource for the community to provide for the everyday public life of urbanized areas. Initially, three communities will have the opportunity to apply for permission to use the program, with more to follow if LVT is proved successful.
LVT is an alternative version of the real property tax used by a number of cities, school districts and counties in Pennsylvania, as well in Australia and New Zealand.
Typically, property tax rates (called mills) fall equally upon land values and building values. LVT shifts the bulk of property tax revenue from buildings ( products of private capital and private labor) to the assessed value of land (a public good created by public and community investment).
Presently land value is often pocketed by private hands in form of speculation and absentee ownership.
The past 50 years have not been kind to the older cities of Connecticut. Industry has moved, stores have been replaced by big boxes on the fringe of town, which follow middle class residents who could not afford urban burdens of taxation, and opted for sprawling development. This created a downward spiral in tax base and an upward climb in tax rates, making the modern commons of public services and public land that much harder to pay for. In Bridgeport’s – one of the poorest cities in the US – the tax burden is nearly 5 times higher than wealthy Greenwich.
It is no wonder that the Connecticut Homebuilders Association, Connecticut Coalition for Justice in Education and the Stamford Urban Development Corporation supported LVT legislation for urban areas. So did the Connecticut Sierra Club, Farmington River Watershed Association and the Connecticut Farmland Trust. Strange bedfellows? Not so much. All are stakeholders in each of their communities.