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Fiscal Panel’s Formula For Revitalizing CT Provokes Some Pushback

Fiscal Panel’s Formula For Revitalizing CT Provokes Some Pushback
CT Mirror, March 29, 2018
By Keith Phaneuf

Progressive Democrats in the General Assembly pushed back Friday against the state’s new fiscal stability panel, charging its recommendations shortchange key priorities, like poor cities, education and social services.

Meanwhile, the leaders of the Commission on Fiscal Stability and Economic Growth conceded they were limited by severe time constraints. But co-chairs Robert Patricelli and Jim Smith also asserted the best way to invest in all of these priorities is to end the cycle of state budget deficits and jump-start a lagging economy.

The co-chairs participated Friday in a marathon public hearing in the Hall of the House, answering questions from members of four legislative committees: Appropriations; Commerce; Finance, Revenue and Bonding; and Planning and Development.

“I’m only seeing sacrifice from the same people over and over again,” said Rep. Robyn Porter D-New Haven, who charged the recommendations threaten to worsen an income inequality trend of historic proportions. “When do we strike a balance?”

According to several nationally recognized policy think-tanks, income inequality in the United States is at its most extreme since 1928, just before the stock market crash that launched the Great Depression. And New York and Connecticut spearhead that trend, with the wealthiest 1 percent of households in those states earning more than 40 times the average annual income of the bottom 99 percent.

The 14-member commission’s March 1 report featured a wide array of recommendations centered on a major redistribution of state taxes — primarily reducing income tax rates across the board while boosting the sales and corporation levies.

But because the wealthy pay the majority of state income taxes, they also would benefit disproportionately from a rate reduction.

Porter questioned why the commission says this and other tax changes that benefit the wealthy — such as eliminating tax on estates valued at more than $2 million — should occur right away, while a proposal to bolster the minimum wage to $15 per hour should be implemented gradually, taking until 2022.

“Why do we have to wait? Why do they get immediate relief and we get gradual relief?” she asked, adding that severe income inequality also strongly reinforces racial inequality.

Rep. James Albis, D-East Haven, cited a 2014 state tax incidence report showing that Connecticut’s heavy reliance on property taxes to fund municipal government “is incredibly regressive” and shifts a huge burden onto lower-middle- and low-income households.

That report found households earning less than $48,000 per year effectively pay nearly one-quarter of their annual income to cover state and local taxes.

Rep. Brandon McGee, D-Hartford, vice chair of the legislature’s Black and Puerto Rican Caucus, said the committee’s recommendations failed to address the need for greater spending on programs to reintegrate prison inmates into the workforce.

He and Rep. Chris Soto, D-New London, both said the report lacks bold ideas on how to revitalize Connecticut’s poor urban centers.

“Frankly, you cannot have a conversation on fiscal sustainability and economic growth without having a conversation first” about these urban priorities, McGee said.

And Rep. Toni E. Walker, D-New Haven, House chair of the legislature’s Appropriations Committee, said she fears a commission proposal to cut $1 billion from the state’s nearly $20 billion annual operating budget would inevitably reduce municipal aid — particularly to cities.

“Candidly, I would agree we came up a little short on the cities,” said Patricelli, a retired health care executive from Simsbury. He added that the high property tax rates in Hartford and other urban centers hinder economic growth. “They really are fighting with one or more hands tied behind their backs.”

Patricelli also noted the commission, created last October by the legislature and appointed earlier this winter, had just under 11 weeks to undertake a Herculean effort: Determine how to jump-start an economy that has underperformed since the last recession and is bogged down by massive state debt tied to cash-starved, public-sector pension programs?

Given those constraints, he said, the panel gave top priority to stabilizing a deficit-plagued state budget and altering a tax system that commission members believe hinders economic growth.

“Having a strong economy makes us able to make the kind of investments you would like to make,” Smith, who also is chairman and former CEO of Webster Bank, told Porter.

Patricelli also urged those critical of the report to consider that commission members tried to craft a package that might pass in a sharply divided, partisan legislature.

Democrats hold a slim 80 to 71 edge in the House while the Senate is split 18-18. Unless a plan reflects concerns from both sides of the aisle, he said, it has no chance for success.

“It does not not mean we don’t care about” income inequality, he told Porter. “If minimum wage were moved up faster, that would be fine with me. Can you get the votes?” 

Commission endorsements back to top

The commission has received endorsements from the Connecticut Conference of Municipalities and from the state’s association of Realtors. Both groups have said that while some of the commission’s proposals would be difficult to accept, they believe the overall plan would help Connecticut prosper.

The commission is trying to win legislative approval for a report that offers a broad array of strategies. Other proposals include:

  • Eliminating $750 million in tax credits and exemptions, most of which are aimed at consumers.
  • Ending collective bargaining for state employee benefits after the current contract expires in 2027.
  • Establishing electronic tolling on highways and raising gasoline taxes to fund a major transportation initiative.
  • Empowering municipal coalitions to add one-half of 1 percentage point to the sales tax rate to fund regional services and diversify local budgets that rely excessively on property taxes.
  • And building a major new college campus focused on science and engineering in a major Connecticut city.

Republican legislators also questioned portions of the report Friday.

Sen. Len Suzio of Meriden pushed back against tolls, questioning whether Connecticut needs to dramatically increase spending on transportation.

Sen. Toni Boucher of Wilton questioned whether a regional sales tax surcharge would help urban centers or weaken their economies.

“Is that going to benefit you?” she asked Waterbury Mayor Neil O’Leary, president of the Connecticut Conference of Municipalities, when he testified at the public hearing in favor of the commission’s plan.

“I don’t know if I’m all that comfortable with the regional tax plan,” he said, but added that Connecticut can’t afford to do nothing. “Any conversation at this point is a welcome conversation.”

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08/05/19 Local Leaders From Across U.S. Met In Bridgeport For Women In Municipal Government And Hispanic Elected Local Officials
05/24/19 Local News Is In A Hidden Golden Age
09/22/17 Local Officials Continue To Worry About Budget Stalemate As Oct. 1 Nears
11/16/17 Local Party Control Shifts Across CT After Municipal Elections
02/14/20 Making Sure The Count Counts
01/11/18 Malloy Chief Says No To $5M for Three Towns For Car Taxes
06/07/16 Malloy Makes ‘Last Minute’ $20 million Cut to State Aid -- Can Towns Depend on Projections?
02/03/17 Malloy Proposes Easing Mandates On Cities And Towns
05/11/17 Malloy Proposes Immediate Budget Cuts, Would Withhold June Local Aid Payments
01/05/17 Malloy's Feb. 8 Budget Proposal To Recalculate Municipal Aid, Education Funding
02/15/19 Manchester Adds Voting District To Ensure Enfranchisement
05/02/19 Mansfield Public Library eliminates Most Fines On Late Books
10/08/19 Mass. Company Competes To Harness Wind Power For CT, Pitching Bridgeport As A Hub
12/28/15 Mayor Mark Boughton’s statewide stature to increase in 2016 as the president of the 158-member CCM
12/21/18 Mayor of Waterbury Re-Elected To Lead Connecticut Towns And Cities in 2019 as CCM President
01/02/18 Mayor of Waterbury to lead Connecticut towns and cities in 2018 as CCM President
11/16/18 Mayors Pitch Lamont On Transit, $chools
04/18/18 Meriden Turns to Social Media for Library Use
01/18/19 Middletown Earns Sustainable CT Certification
03/06/20 Middletown Leaders Using Social Network Live Functions To Promote Open Government
03/22/19 Middletown Looks To Expand Alternative Energy Resources To Renters, Low-Income Homeowners
01/30/20 Middletown: Change Starts at Home
03/17/17 Milford Seminars: Small Businesses Begin With Big Dreams
11/22/17 Minority Leader Calls For Special Session To Stop New Munciipal Aid Cuts
08/16/18 Moderator And Panelists Announced For Likely Last Gubernatorial TV Debate Sponsored By CCM, WTNH NEWS 8, Hartford Courant
03/29/18 Moody’s: Connecticut Cities and Towns Feel Pressured By State’s Fiscal Woes
11/04/15 More than 100 key CT leaders to convene on Nov. 12- 13 for first-ever economic summit brainstormed by CCM, CBIA and CT AFL-CIO
02/29/16 More than 70 municipal leaders to assemble for CCM Day on the Hill on Tuesday, March 1 at the State Capitol; News conference set for 10:45 a.m. with state legislative Leaders
10/05/17 Municipal aid hits multiply as big grants are cut
08/17/17 Municipal Fund Balances At 5 percent Fall Far Short Of Needed Financial Buffer
12/11/19 Municipal Leaders From Wolcott and East Haddam Honored With Major Awards In Achievement And Innovation at CCM’s Annual Statewide Convention
09/08/17 Municipal Leaders Have Shown You Our Sustainable Plan — What Is Yours?
09/24/19 Municipal Leaders Make Push To Free Up Infrastructure Grants
04/26/19 Municipal Leaders Meet With Lamont But Neither Side Makes Any Promises
03/02/16 Municipal leaders pushing for change in spending cap
05/03/18 Municipal Lobby Makes Final Push To Protect Emergency Reserves From Labor
01/14/16 Municipal Lobbying Group Launches TV Ad Campaign
08/09/17 Municipal Officials Fear Info Sought By Malloy Could Lead To Slashed Aid
07/28/17 Municipalities Are Increasingly Struggling Without Budget Deal In Place
02/07/20 Municipalities Examine What State Budget Proposal Brings Home
03/16/16 Municipalities look to streetlights to save money
03/12/20 Municipalities Mull Meeting Cancellations In Wake Of Coronavirus
08/02/18 NBC30 Forum -- At A Price: The Cost of Local Town Living
11/14/19 New Britain Offers Assistance To Property Owners To Repair Sidewalks
12/05/19 New Britain’s Data Center Project Represents A Massive Change
11/30/17 New CCM Initiative Helps Towns Become More Sustainable
08/10/16 New CCM Report Shows How Local Officials Can Best Combat Drug Abuse in Their Communities
08/12/16 New CCM report shows how local officials can best combat drug abuse in their communities
03/23/15 New federal data shows low-income students shortchanged for education funding; CCM points to overdependence on property taxes; $600 million underfunding of ECS grant
05/24/18 New Haven Aims To Solve Parking Problems Downtown
06/27/19 New Haven Board of Alder Leaders Inject Community Voice In Development Boom
10/11/18 New Haven Home Sale Price Doubles In 13 years
03/22/19 New Haven Parking Scofflaws Owe City $13.8M
02/28/20 New London In Pursuit Of A Strong Economic Future
12/20/19 New Milford IT Department: Small Changes Make Town Safer
01/25/19 Newtown Educates Citizenry About Fire Prevention
03/03/20 NLC: Managing Through the Coronavirus: What Local Leaders Need to Know
02/10/17 No One Wants A Share of CT’s Teacher Pension Bill
10/24/19 No Quick Resolution To Municipal Recycling Squeeze
04/13/17 Northeastern CT Town Leaders Struggle With Creating Firm Budgets This Year
02/08/19 Norwalk has multiple bus projects in the works
07/26/18 Norwalk Park: Brownfield Remediation in Action
12/11/15 Norwich Bulletin -- Our View: Economic summit produced host of good ideas
04/06/18 Offshore Wind Could Be A Boon To New London's Port
02/01/16 Op-Ed --In Connecticut: We Must Become the Change We Want to See, by Joe DeLong CCM Executive Director
12/03/15 OP-ED | State‘s Tax Panel Must Resolve Residents’ Biggest Tax Problem—The Property Tax
12/07/15 OP-ED | State‘s Tax Panel Must Resolve Residents’ Biggest Tax Problem—The Property Tax
01/20/16 OP-ED | What CCM Means by ‘Collaborating for the Common Good’
04/22/19 OP-ED: Municipalities Present Solutions To Minimum Budget Requirement For Education
09/16/19 Opioid Settlement Money Must Be Used To Fight The Scourge
10/21/16 Organization Draws Focus To Poverty, Struggling CT Cities
07/01/16 Our State: A Good Place To Be Evicted, Except For Towns
03/28/16 Our View: Municipal aid reduction would be tax hike by another name
11/11/15 Over 175 key CT leaders to convene tomorrow Nov. 12- through Nov. 13 for first-ever economic summit
07/24/17 Over 60 Towns & Cities Respond to CCM Survey Illustrating Service & Fiscal Constraints Imposed On Local Governments As New Fiscal Year Begins Amidst Continuing State Budget Impasse
06/17/15 Over 80 municipal officials to assemble for June 18 CCM Annual Meeting; New CCM Executive Director to present first major address on the "New CCM" and legislative concerns with coming Special Session
11/23/16 O’Leary Elected Vice President of CCM
05/30/19 Pension Offsets Bill Would Be The Worst And Most Costly Workers Compensation Legislation In Years
07/26/18 Pension Shortfalls Loom Large; Two Experts Talked Solutions With CCM
01/11/19 Plastic Coyotes Protect Middletown Park From Geese
08/22/16 Point Counterpoint; Lori Pelletier, CT AFL-CIO vs. Joe Brennan, CBIA
08/02/18 Pomfret: Using Nature’s Lawnmowers To Keep Weeds And Brush in Check
11/23/16 Portland First Selectwoman To Head Connecticut Conference of Municipalities
01/30/20 Property Tax Appeals Are Costing Hartford, Other Munis Big Bucks. Now Towns Want To Reform The System.
09/09/19 Property Taxes A Drag On All Of CT, Not Just Hartford
05/17/19 Proposed Deal Presented On PTSD Benefits For Police And Firefighters
02/18/15 Proposed state budget would maintain overall state aid to towns and cities
05/05/17 Punishing Property Tax Just Keeps Growing
08/24/16 Push for Regional Cooperation Intensifies in Connecticut
03/31/17 Raising The State Sales Tax Not Off The Table
03/22/18 Raymark in Stratford Makes Short List For Redevelopment
12/19/16 Reaching Across Borders Can Be A Win For Towns, Cities
08/25/17 Report From Malloy Seeks To Re- Frame Debate Over Changes To, Need for, State Aid
07/18/16 Report: CT, New England States Lag Nation In Capital Spending
03/16/16 Republicans pitch furloughs, restore hospital aid, put municipal revenue sharing at risk
03/10/15 Resident state trooper proposal would cost 29 towns $3.1 million; total for all towns would exceed $5 million
01/02/20 Ridgefield Addresses Vaping Problems Before They Begin
09/24/19 Ridgefield Battles Vaping At High School, State Legislature
05/10/19 Rising Local Recycling Costs Putting Pressure On Lawmakers To Pass Plastic Bag Ban, Expand Bottle Deposit System
04/26/17 Sales Tax Proposal Contingent On Cost-Control Measures Being Adopted
02/07/18 See-Click-Fix! Hamden Joins Growing Number Using Mobile App
05/17/18 SeeClickFix Grows Into Role Helping Towns Manage Storm Response
05/25/16 Senate Leader Pledges Commitment to Capping ‘Unfair’ Car Tax
05/17/19 Seymour Collaborates With CT Economic Resource Center
04/03/20 Shelton Firm Working On COVID-19 Drug
09/17/18 Single-Use Plastic-Bag Ban Instituted In Greenwich
09/16/19 Small Green Initiatives add up to Big Green Savings in North Stonington
05/24/16 Some Win, Some Lose In State Aid Allotments
03/19/15 Special appropriations forum with municipal leaders on Governor proposed budget
02/09/16 Speed DMV lines by shedding collection role; problematic for towns
08/23/18 Stamford High School Health Center Is A Model For Student Health
08/16/19 State Bonding Gridlock Stalls Summer Repaving Funds
02/17/17 State Budget Fallout Slams Fairfield
05/27/16 State Handing Towns Responsibility For Unclaimed Human Remains
12/06/18 State Mandates: Fiscal Note Impact Not ‘Potential Minimal’
10/08/19 State Reports First Vaping-Related Death
07/05/17 State To Allow More Input on Cellphone Antenna Placement
08/09/18 State’s first cohousing community to be built in Bethany
10/13/17 Still No Budget: CCM Doesn't Want Pensions Pushed on Towns
12/11/19 Students From Stafford Middle School Joseph A. Foran High School in Milford Take Home Scholarships at CCM’s Annual Convention
01/18/18 Supreme Court: CT's Education System Is Flawed, But Not Unconstitutional
01/03/19 Take Care of Pensions Now
06/27/19 Teacher Pension Cost Debate May Not Be Over Yet
04/21/17 Teachers Union, Local Leaders Speak Out Against Pension Cost-Shift Proposal
05/24/18 Telecom Industry, Towns Continue Fight In Municipal-Broadband Case
12/06/18 The Pension Buck Stops Here
09/14/17 The Time for Municipal Line-Item Veto of Education budgets Has Come
08/29/19 The Wheels On The Bus: Bus Transportation Serves Millions Across CT
03/01/18 Timber! – at Sharon's Housatonic State Forest
11/28/18 To Report Bullying And Bad Student Behavior, CT Schools Turn To Anonymous Reporting Apps
01/18/19 Tolls, Special Ed. Funding, Shared Services On Same Page for Mayor & Senator
08/09/16 Town Declines State Grant Over Objections To Municipal Spending Cap
02/22/19 Town Officials Concerned About Aid Levels, Shift In Teacher Pension Costs In Lamont Budget
04/13/18 Towns and Cities Adamantly Oppose Costly, Unnecessary, New Benefit For Police And First Responders
05/11/17 Towns Ask Why CT Officials Won’t Touch Teachers’ Pensions
02/23/18 Towns Face Tax Pressures After Slow Recovery From Great Recession
04/03/20 Towns Implementing Low And High Tech Tools To Keep Town Business Running
03/02/16 Towns Look To Fend Off Budget Cuts
03/03/20 Towns Need Greater Partnership With State And Businesses To Battle Environmental Fallout From Fire-Fighting Foam Leaching Into Municipal Aquifers And Public Water Supplies
06/08/17 Towns Rattled By State's Budget Uncertainty
03/22/18 Towns Told To Make Up For State Education Cuts
08/26/16 Towns Wary of Local Spending Cap As State Begins Revenue Sharing
10/24/19 Towns, CCM, Says Winter Won’t Wait For Lamont, Legislators To Cut Deal
03/01/16 Transportation Committee Debates Merits Of DMV Bill, Delinquent Motor Vehicle Taxes
12/14/18 Trash diversion Looks For A Smarter Way In New Haven
04/12/19 Triple Crown Charity On Tap
04/27/18 Trumbull Day is Back!
03/17/17 Trump’s Education Budget: 4 Things To Know For CT Schools
07/05/17 Truth – House Dems Sales Tax Fairer Than Onerous Property Tax Hike
12/14/18 TV news, newspaper websites lead pack for citizens seeking info
05/31/18 Unallocated FY 18 Town Aid Road (TAR)
02/01/19 Underfunded Teacher Pension Fund could hinder future budgets
04/18/18 Understanding the Great Connecticut Taxpocalypse
07/10/19 Upheaval In Recyclables Market May Cause CT Towns To Lose Serious Bucks
06/22/18 Vexatious FOI complaints Subject Of New Law
01/15/16 Video on CTN: CCM Capitol News Briefing on the Launch of Statewide Media Campaigns
11/20/19 Walkable Towns And Cities Inject A Little Color Into The Landscape
12/05/16 Walker: ‘Devastating’ Cuts Cannot Solve CT’s Budget Woes
04/13/18 Wall Street Firm Says Federal Tax Limits Could Hurt CT Towns
05/24/19 Waterbury Looks To Brand Cities Recent Growth
11/08/17 Welcome to CT's Newly Elected Mayors And First Selectmen
03/01/19 West Hartford Makes Extensive Use Of Free CCM Service To Save Money On Prescriptions
10/31/19 West Haven Finds Developers To Buy Two Former School Buildings
08/30/18 West Haven is one step closer to seeing The Haven Shopping Center Open
08/25/17 Westport Police Gear Up For Citizen Police Program
10/27/17 Wethersfield Remembers Its Seniors: Town Offers Many Programs for Elderly
03/29/19 What One Local Government Did Right
06/05/18 Who Rescued Who? North Haven Invests in its Pets
05/10/19 Wilton Brings Departments, Organizations In The Know On Tax Credits
01/03/19 Wilton Prepares For Snowfalls By Optimizing Routes
05/18/15 With major cancer presumption bill reaching critical stage, CCM begins airing radio messages calling on legislators to turn aside this costly unfunded state mandate
06/15/17 Without a CT Budget by July 1, The Options Are All Bad
06/29/17 Without State Budget, Towns Could See Steep Cuts Under Malloy’s Executive Order
01/18/18 Woodbridge Budget Presentation Second To None