Finance, Revenue and Bonding Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-5885

Title:

AN ACT CONCERNING THE MUNICIPAL SHARE OF THE REAL ESTATE CONVEYANCE TAX.

Vote Date:

3/27/2008

Vote Action:

Joint Favorable Substitute

PH Date:

3/24/2008

File No.:

SPONSORS OF BILL:

Finance, Revenue and Bonding Committee

REASONS FOR BILL:

The substitute bill wording has changed “permanent” to an extension to 2 years until 2010.

RESPONSE FROM ADMINISTRATION/AGENCY:

None Expressed.

NATURE AND SOURCES OF SUPPORT:

Natalie Ketcham, First Selectman of Redding supports this bill because it will help preserve a critical source of financial assistance for Connecticut towns. The revenue has helped fund K-12 education, public safety, transportation and other essential local services.

Susan Bransfield, First Selectman of Portland supports this bill because it has been a critical revenue source over the past few years. The funds have been used to plug holes in Portland's town budget, which have resulted from cuts in state aid programs that have yet to be restored to pre-2003 levels.

Steven N. Wawruck, Jr., First Selectman of Windsor Locks supports this bill because it provides much needed revenues to towns and cities across Connecticut. Losing this revenue would place an incredible strain on town budgets, which are already faced with cuts in state aid that have not been restored to pre-2003 levels.

Frank Chiaramonte, First Selectman of Harwinton supports this bill because without this revenue Connecticut towns would struggle to meet their obligation to provide critical services to their residents and local businesses, including education, public safety, human services, public works and economic development.

Melody Currey, Mayor of East Hartford and Chair of the Capitol Region Council of Governments (CRCOG) Policy Board supports this bill because it is beneficial to supporting the livelihood of the region and its municipalities.

Connecticut Conference of Municipalities supports this bill because the revenue is vital to local governments and property taxpayers. Three main reasons to make permanent the increased rates are: provide important revenue to local governments and property tax relief to local residents and businesses, mid-year cuts enacted by the State in municipal aid programs that prompted the increased rates have not been fully restored, and the rate increases have no impact on the housing market.

NATURE AND SOURCES OF OPPOSITION:

Various members of the Connecticut Assoc. of Realtors, Inc. are opposed to this bill because it would overturn the existing law in order to re-impose an additional tax on home sellers. 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. This bill would be singling out a small part of the population – property sellers – to pay for extra town aid benefiting other residents who are not so taxed.

Reported by: Kerri Malloy

Date: 3/27/2008