Stafford, CT – September 5, 2024
Taxes are a hot-button issue in town. For many, the way to drive down the mill rate is to bring more business into town, and the idea of offering tax abatements was tossed around at the Economic Development Commission when Sal Titus was still First Selectman. However, the issue came up at the latest Board of Selectmen. Two of the three selectmen (Kurt Vail was absent) heard arguments for two possible tax abatements in a packed room.
Tax abatements for daycares
The first centered on home daycare facilities, a topic that has come up in the past. In 2022, the state adopted legislation that allows towns to abate up to 100% of property taxes for properties owned by a licensed daycare provider. The goal is to encourage more daycares to open, address a shortage of providers, and bring down costs in the meantime.
According to the Economic Policy Institute (EPI):
The average annual cost of infant care in Connecticut $1,292 per month.
Child care for a 4-year-old costs $1,061 each month.
Connecticut is ranked fifth out of 50 states and the District of Columbia for most expensive infant care.
The conversation was reignited by a letter from a local daycare provider to First Selectman Bill Morrison. Tami L. Rossi, Stafford’s assessor, said that five properties in town would be eligible for this abatement and ran the numbers on a few different scenarios. If the town abated 100% of the property taxes for all of these providers, it would represent a loss of $24,462 per year. A 50% abatement would be a loss of $12,231 per year. She also pointed out that some towns have opted to simply make it a flat amount of $1,000 per dwelling, which would mean a $5,000 loss per year.
Additionally, Rossi said that those numbers were based on the total assessment of each property, and the town could limit the abatement to only the dwelling, bringing the first two numbers down to $18,500 and $9,250, respectively.
Selectman Rick Hartenstein recalled that this topic had come up in the past and said that though he understood the reason for it, he did not favor a 100% tax break. Later, he added that many people work out of their homes, and he wondered why daycares were the only businesses targeted for this abatement.
The answer, of course, is that according to EPI, childcare is unaffordable for most families in the state: “According to the U.S. Department of Health and Human Services (HHS), child care is affordable if it costs no more than 7% of a family’s income. By this standard, only 11.5% of Connecticut families can afford infant care.” The availability and affordability of quality childcare have other economic impacts. EPI says that if childcare costs were capped at 7% of income, 15,349 more parents would have the option to work, and Connecticut’s economy would expand by 0.8% (or $2.1 billion).
Because the town already has abatements for volunteer firefighters and property tax reductions for homes with crumbling foundations, Morrison wondered if a property could be impacted by all three. One property is, in fact, already affected by the foundation reduction. The answer was unclear but would likely be determined by the details of how a potential resolution was adopted.
The BOS decided to table the discussion while they do more research.
Should the town consider tax abatements to spur development?
Yes
No
Borough School abatement
In addition to the possible daycare abatement, Bluebird Construction’s Constantine Constantinou asked the town to consider a tax abatement for the Borough School property. The company is renovating the formerly abandoned school into a 20 unit apartment building that includes six affordable units.
Constantinou told the BOS that he has tax abatement deals with the other towns he works in, like Hartford, Enfield, and South Windsor. He said that the abatements typically start out at 100% and decrease over ten years. For instance, the second year of the abatement would be 90%, the third year would be 80%, and so on, until he is back to paying 100% of taxes on the property. Constantinou stressed that these abatements incentivize companies to invest in the town.
The BOS was aware, however, that granting this abatement could set a precedent. Rossi told the board that the state recently changed the time limit on these abatements from 10 to 30 years but that the board could choose to enact an abatement for any amount or time. She also pointed out that until Constantinou bought the building, it did not generate tax revenue, so the town would not lose anything initially.
Charles Callahan of Lakeshore Boulevard, who was in the audience, said he supported extending tax abatements to spur economic development.
“Given that this is precedent-setting,” Morrison said, caution was advisable. Hartenstein said he would like to table the discussion until next month.
Constantinou said, “The town of Stafford has been more than helpful.” Hartenstein thanked him for doing something with the blighted building.
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