Submitted to the Finance, Revenue and Bonding Committee

March 24, 2008

By
T.J. Zappulla

Good day. My name is T.J. Zappulla, and I'm a director of the Litchfield County Board of REALTORS®, and a former chairman of the Legislative Committee of the Connecticut Association of REALTORS®.

The message I leave with you is: Please respect the current law that rolls back the expanded real estate conveyance tax on July 1, 2008. In order to respect the law, you should not approve Raised Bill No. 5885. This bill would cancel the long overdue property tax relief prescribed for homesellers to take place in a little more than 90 days.

From the outset, this extra real estate conveyance tax was intended to be a temporary source of support to towns. When State aid was reduced in the fiscal crunch of 2003, the newly created tax was only intended to last for 15 months. Instead, this regressive levy was extended three times to give town governments an undeserved bonanza at the expense of homesellers, especially the elderly, who worked hard to save for their future.

Municipalities must be realistic in formulating their own local budgets. They should NOT rely on the continuation of the temporary expanded conveyance tax. State aid to towns during the past two years has experienced historic increases. Besides huge education grants, towns have benefited from increased land use application fees and a $ 30 document recording surtax. REALTORS® favor reasonable state aid to towns, funded in a broad-based manner, but the municipal cost drivers must be controlled first!

We hear a lot of talk this session about the State spending more money to promote housing initiatives. It is clearly counterproductive to let this additional barrier to homeownership stand when the overall goal is to reduce impediments to the creation of workforce housing. It is especially detrimental in urban areas, where the conveyance tax is often twice as high as in outlying suburbs.

Thank you. Are there any questions?