{news} LVT editorial in The Day

[Ronna Stuller]

http://www.theday.com/re.aspx?re=5bb27e1f-7ac7-4215-95bf-8cab3527a89f

TheDay.Com

NL Should Seize Chance To Encourage Growth
By The Day

Published on 7/12/2009 in Home »Editorial »Editorial

New London has an opportunity to make a fundamental change in its tax  
system, making it stand out alone in Connecticut as a community that  
does not penalize through higher tax assessments for owners who  
improve and develop their properties. Done correctly, it could be a  
major catalyst in renewing this city.

A group of urban reformists, operating as Re-New London, argue that  
the city's time has come and it is only a matter of seizing the  
opportunity. In an age of higher energy costs, at a time when people  
are coming to realize that suburban sprawl is not only costly but  
damaging to the environment, a renewal of city life is under way.

With its access to mass transportation - trains, ferries, buses and  
adjacent interstate - its recreational opportunities, growing art  
community, increased housing opportunities and shoreline location, New  
London should benefit from this new appreciation of city life. Doing  
the same old things is not the way to realize the city's potential.

Art Costa and Kenric Hanson, who have run unsuccessfully for City  
Council as Green Party candidates (Hanson also ran for step  
representative in 2008), have led Re-New London's call for switching  
to land-value taxation. LVT is a two-tiered system that taxes land at  
a higher rate than buildings.

Used successfully in about 20 Pennsylvania communities as that state  
worked to recover from the collapse of its steel industry, the intent  
is to drive redevelopment. In commercial districts, property owners of  
vacant buildings or empty lots are often reluctant to make  
improvements until they see solid signs of progress around them.  
Without confidence in success, why improve or construct a building if  
it means higher property taxes?

But under LVT the larger share of the burden shifts to the land.  
Speculators, sitting on unused or underutilized properties, find taxes  
going up on their undeveloped lots. It is then in their interest to  
improve their properties or sell to someone who will.

LVT can be fashioned somewhat differently in residential  
neighborhoods, but with the same intent to encourage the improvement  
of properties. Some communities opt to utilize it only in business  
districts.

To its credit, the City Council set politics aside and unanimously  
supported the LVT concept. With that backing, Re-New London lobbied  
the state legislature to allow the new tax system in Connecticut  
cities. Lawmakers opted instead to allow New London alone to use it as  
a pilot project, if it so chooses.

The Center for the Study of Economics, working with Re-New London, has  
drafted several potential tax models for New London. The council  
recently sent the matter to its Economic Development Committee. To  
begin the process the city must file an application with the state. It  
should do so soon.

The legislature set an unreasonable deadline, Dec. 31, to submit a  
detailed LVT proposal to the Office of Policy and Management and to  
legislative committees for approval. As part of the process the city  
manager must appoint a committee of “relevant taxpayers and  
stakeholders” to help prepare the plan.

While the council must work diligently, it should not rush matters. If  
New London can demonstrate progress, there is no reason the  
legislature should not extend more time. After all, no legislature is  
great at meeting its own deadlines.

LVT offers the opportunity for substantial change. The city should  
embrace it.

"New London-CT"

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