LVT Comes to New London, Connecticut

by Josh Vincent

This July 1st, Governor Jody Rell signed into law HB 379, which is a pilot program that permits the distressed city of New London, Connecticut to tax land and buildings at different rates. This is the culmination of an effort that began with communication and data gathering with New London activists trying to save their city, led by ReNew London, headed by Art Costa. LVT was seen as part of a package that will help the city become what it should have been all along: wealthy and prosperous. The city of New London Connecticut has a storied history that rises and falls with analog swells in American economic history: fishing, whaling, seaport, industrial hub, shield of the US during the cold War, and finally post-industrial obsolescence.

In that time, the population and the wealth of that city rose to a high of 34,182 in 1960, and shriveled to 25,671 by 2000, a decline of 21.5%. Worse, the city’s poverty has grown, with 15.6% of the population currently under the poverty level, compared to 7.6% of the state, and indeed 7.5% of New London County. Homeownership rates are just as ominous: the state and county average of around 66.7%, while New London city has a rate of 37.9% — down from 64% in 1990.

The effort to pass this bill was kicked off in January, 2007 with a visit of the Center for the Study of Economics and the Henry George Foundation, at an educational event held at the public library. About 20 were there, including the Mayor and several council people. Press coverage was favorable, interest was piqued. New London as a city essentially agreed that any option that could help should be legal.

In 2008, the effort gathered steam with much communication between CSE/HGFA and ReNew London. State legislators and statewide advocacy groups for the environment, economic development and urban revitalization were constantly met with a committed, knowledgeable cadre of Southeast Connecticut activists offering compelling analysis and theory.

Many of these organizations eventually endorsed LVT, both as an idea and as a tool for Connecticut cities. Key help came from past allies in LVT enabling efforts in the early part of the decade, including the Connecticut Conference of Municipalities and the Connecticut Homebuilders’ Association. By the end of the victory process, these groups could be counted on as advocates for a new way to help the economy and provide a fairer tax system.

2009 endorsers included: AFSCME Council 4 (membership of 35,000), Connecticut Conference of Municipalities, Connecticut Sierra Club, Farmington River Watershed Association, Hartford Preservation Alliance, Homebuilders Association of Connecticut, New London Landmarks, Main Street, Economic Development Commission, Rivers Alliance, City Council, Southeastern Connecticut Sierra Club, City delegations from: Stamford, New Haven, Hartford, Bridgeport, New London.

Eventually three bills were introduced. One authorized differential mill rates in local taxation; the second established a pilot LVT program; the third authorized municipalities to adopt LVT. Advocates pushed hard for a more inclusive bill that would include all major towns and cities in Connecticut. These were the type of bills that had made it into the Senate in years’ past. After a day of testimony in February, we saw much support from our allies, and the New London members of the LVT Working Group led by Mr.Costa and Georgist advocates such as Gil Herman, Bill Batt, Wyn Achenbaum, Cathy Orloff as well as CSE and HGFA directors.

Testimony was generally well-received although the one member of the Planning Committee consistently tried to find flaws both in the testimony and the concept. It seemed to me that he represented a wealthy-off, vaguely rural area, serving as a straw man. Given his district is perched on a hill overlooking the troubled city of New Haven, this lack of concern for the problems of poor Connecticut cities was all the more surprising. In the end, we are left with a Pilot Program, after his active efforts to deny New London a true local option. Yet it’s a good victory, and has raised the issue of LVT in Connecticut, and also the injustice of poor cities existing in nearly the richest state in the USA. A June presentation at the Connecticut Assessors’ “Summer School” at U Conn brought strong interest. LVT might be an idea that can’t be stopped.

What will happen? We hope the Secretary of State will help us design the Pilot so that several options for LVT may be explored: rate changing, assessment exemptions on all buildings, a combination of the two, or even a more ambitious plan to replace income tax receipts from the city by an annual remit of land values. Some in council, however, will want to apply it only to the Central Business District.

Right now, New London and other “poor” Connecticut cities are sitting on a pile of socially created economic rent that is passing through to absentee landlords and corporate welfare overlords. A city whose social and economic indicators are in free-fall gives away privilege, monopoly and wealth to Pfizer, while homes crumble. This LVT victory is a small step in education and implementation to help these cities realize that the rules of the game can change to the benefit of all.

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