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Car Crackdown Gets Rolling
In taxing effort, city takes aim at improperly register autos
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Business New Haven
1/25/1999
By: BNH
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Four months ago the city of New Haven pledged to get tough on city residents who register their cars beyond the city line in order to avoid paying taxes.
So far, at least, that pledge has been honored.
To date the city has notified more than 200 people of violations, while another 5,000 cases are under investigation, according to Mayor John DeStefano Jr.
In August city officials retained the Connecticut Tax-Fraud Bureau (CTFB), a private firm run by retired state troopers - to identify auto-tax scofflaws. The information they unearth is then forwarded to the city assessor's office, which notifies the tax dodgers.
CTFB reports that of the initial 200 potential scofflaws contacted, just 14 reported legal reasons to register vehicles outside of the city.
DeStefano says he hopes to recapture sufficient lost tax revenue to reduce taxes for a third consecutive year. But how much revenue is the city losing out on? Without knowing how many improperly registered vehicles there are within the city it's impossible to say.
However, according to city assessor Larry Hughes, every 1,000 autos illegally registered out of town or out of state represent on average $220,000 in lost city tax revenues. The city presently has about 42,000 motor vehicle accounts which generate some $7 million in annual tax revenue - about five percent of the city's budget.
Because New Haven has one of the lowest per-capita rates of registered vehicles in the state - just 0.34 cars per person, compared to 1.04 in North Haven (see accompanying chart) - city officials suspect that a large number of residents register their cars in other municipalities to avoid paying property taxes on the vehicles - especially before citywide revaluation in 1997, when the mill rate stood at 61.14. This year the mill rate stands at 35.04, but the number of registered vehicles has not risen concurrently.
CTFB is being paid on a contingency basis for one year, receiving a percentage of revenues collected. After that time the city will receive the full amount of tax revenues collected.
In 1994 the city's overall tax-collection rate was 86.25 percent. Since then the collection rate has risen to 92.17 percent, in part through the highly controversial sale of tax liens to private companies.
“This program is about fairness, about people paying their fair share of city taxes,” DeStefano said, “and I'm very pleased by the successes we've seen so far.”
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