The state’s mayors are testifying today in favor of a regional sales tax and a regional hotel tax – as part of a long-running battle to obtain more money for the state’s cash-strapped cities and towns. <\/p>\n
New Haven Mayor John DeStefano, who first started working for the city of New Haven 31 years ago, said the municipalities have already been doing everything they can to balance their budgets in tough fiscal times. New Haven, which has a 98.3 percent tax collection rate, has already closed two schools, cut public library hours, and imposed three rounds of layoffs over the past two years in order to avoid property tax increases.<\/p>\n
“Our core employers – Yale and Yale-New Haven Hospital … experienced healthy growth,” DeStefano said, noting that both entities pay millions of dollars to the city. “The road to Connecticut’s economic resurgence goes straight through our central cities. … There can be no economic recovery without vibrant central cities.”<\/p>\n
“We have one tool in our tool kit: this property tax,” said DeStefano, who ran for governor in 2006 against incumbent Republican Gov. M. Jodi Rell.<\/p>\n
DeStefano said that 87 percent of the people who work in Hartford live outside the city, while 70 percent of those working in New Haven live outside the city.<\/p>\n
East Hartford Mayor Melody Currey spoke in favor of a regional sales tax, saying she would keep the state’s long-running sales-tax exemptions that currently exist for food and prescription drugs.<\/p>\n
“We’ve all had to cut back services,” said Currey, a former Democratic state legislator. “In our communities, we’re doing public safety, public works, and education. That’s all we can afford to do.”<\/p>\n
She said that Connecticut has wiggle room on the sales tax because the surrounding states have higher rates. Massachusetts is at 6.25 percent, while Rhode Island’s sales tax is 7 percent. Vermont is at 6 percent, but local jurisdictions can add another percentage point.<\/p>\n
“Other states do it. Connecticut is in the minority of states that don’t,” said Gian-Carl Casa, a longtime lobbyist for the Connecticut Conference of Municipalities. “The need for revenue diversity is acute. … What you’re hearing from local officials is really a cry for help.”<\/p>\n
Some legislators are concerned about pitting one town against another in either making changes in the sales tax or the hotel tax. If one town gets to keep a small percentage of the sales tax, communities like Danbury and Manchester could reap huge windfalls. But the communities right next door would not. As such, the ideas of making changes in the sales and hotel taxes have failed in the past. But they keep coming back as cash-strapped communities try to raise money to balance their budgets.<\/p>\n
Some mayors are also pushing for a permanent increase in the conveyance tax on real estate transfers, while the state’s Realtors have been working against such an increase for years.<\/p>\n
Rep. Vincent J. Candelora, the ranking House Republican on the finance committee, said he agreed with the concerns of Rep. Pat Widlitz, a Guilford Democrat who raised concerns about pitting towns against each other. <\/p>\n
“One size doesn’t fit all,” DeStefano responded. “East of the River is very different from Fairfield County. … Right now, you’ve got this one choice. … Right now, all we can do is drill property tax payers.”<\/p>\n
If he had a choice, DeStefano said he would drop the automobile tax, which provides relatively little revenue and takes up the most time to collect by local tax offices. In some communities, the cars represent about 7 percent of the overall revenue and their collection takes up more than 50 percent of the time of the local tax collectors.<\/p>\n
DeStefano noted that Rell twice tried to eliminate the car tax in her annual budget proposal, which was “a good idea,” adding that “some of us didn’t support it because we were afraid we wouldn’t be held harmless.”<\/p>\n
“Why exempt the film industry from taxes?” DeStefano asked, referring to the state’s sometimes controversial film policy that has prompted the filming of major motion pictures across the state.<\/p>\n
DeStefano disagreed with Rep. J. Brendan Sharkey, a Hamden Democrat who is one of the legislature’s leading voices for property tax reform and regionalization.<\/p>\n
“Representative Sharkey, I guess I disagree with some of your premises that these taxes are bad,” DeStefano said. “In New Haven, 70 percent of the people are not homeowners. They’re renters. … I’m lucky. We’re growing jobs in New Haven. Off non-profits. Who knew? … We are going to die if we don’t grow.”<\/p>\n
On another issue, lawmakers are debating whether to make permanent the previous increase in the state’s conveyance tax that has been scheduled to expire several times.<\/p>\n
Realtor Robert Casey, talking on behalf of 17,000 member Realtors statewide, “This tax is an increase on housing. It was scheduled to terminate after 15 months in 2004.”<\/p>\n
On a regular basis, Casey said he talks to people whose homes are under water – meaning the mortgage is higher than the home is worth at the moment.<\/p>\n
“The conveyance tax is affecting whether they are able to sell that home,” Casey told legislators.<\/p>\n
Sen. Eileen Daily, the longtime co-chair of the finance committee, asked Casey exactly who made a promise to whom over whether the conveyance tax increase would only be temporary.<\/p>\n
“That’s not a promise,” Daily said. “I don’t think any promise was ever made to any person. … Perhaps the real problem we have here is it keeps sunsetting.”<\/p>\n
The regional hotel tax received mixed response.<\/p>\n
“Why is the lodging industry being targetted for extra tax revenue?” asked Chuck Moran, president of the Connecticut Lodging Association and general manager of the Courtyard By Marriott Cromwell. “Adding another level of taxation will be detrimental.”<\/p>\n
The problem, he said, is that the state’s marketing and tourism budget has been slashed sharply, which hurts the hotel industry.<\/p>\n
Tim Phelan, president of CRMA, the Connecticut Retail Merchants Association, said he favors “leveling the playing field” among Internet retailers and the brick-and-mortar retailers who must compete against them in Connecticut and pay the 6 percent sales tax.<\/p>\n
“Our members have been dealing with this issue for an awful long time,” Phelan said in testimony on the “remote sellers” bill.<\/p>\n","protected":false},"excerpt":{"rendered":"
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