Finance, Revenue and Bonding Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-946

Title:

AN ACT CONCERNING REVENUE ITEMS TO IMPLEMENT THE GOVERNOR'S BUDGET.

Vote Date:

4/29/2015

Vote Action:

Joint Favorable Substitute

PH Date:

3/9/2015

File No.:

SPONSORS OF BILL:

Governor Dannel P. Malloy

INTRODUCED BY:

Senator Looney, 11th Dist.

Senator Duff, 25th Dist.

Representative Sharkey, 88th Dist.

Representative Aresimowicz, 30th Dist.

REASONS FOR BILL:

The bill implements the major revenue elements of the Governor's plan to balance the FY 2015 and FY 2016 budgets.

SUBSTITUTE BILL:

Sec. 1: Establishes a new top marginal rate (6.99%) in the Income Tax for those tax filers with CT Adjusted Gross Incomes over a certain thresholds. This section also establishes a 2% supplemental tax on all capital gains income for those tax filers with CT Adjusted Gross Incomes over a certain amount.

Sec. 2-4: Delays the scheduled increase in the personal exemption for Single Filers of the Income Tax from $14,500 to $15,000.

Sec. 5: makes technical changes, restricting taxable years to between January 1, 2014 and January 1, 2017.

Sec. 6: changes “50% of the” to “any” income received from the United States Government in connection with the income tax exemption for military retirement pay.

Sec. 7 & 8: Extends the 20% surcharge on the Corporate Income Tax for certain filers and phases out the surcharge after the FY 16 and FY 17 Biennium.

Sec. 9: Delays the scheduled expiration of the two lower tiers of caps on credit utilization against the Insurance Premiums Tax.

Sec. 10: expands applicable fiscal years to years ending June 30, 2016 and 2017 in connection with the issuance of new film tax credits.

Sec. 11: changes the state revenue tax rate from 6.35% to 5.85% and adds a municipal revenue tax rate of 0.5% of gross receipts of any retailer from the sale of all tangible personal property sold. This section also states that for years ending on or after December 31, 2015, the commissioner shall deposit the amounts received by the state from the municipal revenue tax into the municipal revenue sharing account

Sec. 12: makes technical changes and makes numerical changes to the state revenue tax bracket system. Establishes a bracket system for municipal revenue tax.

Sec. 13: changes the state revenue tax rate from 6.35% to 5.85% and adds a municipal revenue tax rate of 0.5%.

Sec. 14: changes the state revenue tax from 5.85% to 5.35% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail or from the rendering of any services constituting a sale.

Sec. 15: makes numerical changes to the state revenue tax bracket system.

Sec. 16: changes the state revenue tax from 5.85% to 5.35% on the storage, acceptance, consumption or any other use in this state of tangible personal property purchased from any retailer for storage, acceptance, consumption or any other use in this state, the acceptance or receipt of any services constituting a sale.

Sec. 17: changes the rate of tax from 6.35% to those set in Sec. 11.

Sec. 18: makes technical changes, in subparagraph (A) removes exclusive of services rendered in connection with the creation, development hosting or maintenance of all or part of a web site which is part of the graphical, hypertext portion of the Internet, and adding new subparagraph (OO) expanding the list of professional services.

Sec 19: removes years and tax rates prior to July 1, 2001 with respect to the sales of computer and data processing services.

Sec. 20: removes years and tax rates prior to July 1, 2001 with respect to the acceptance or receipt in this state of computer and data processing services purchased from any retailer for consumption or use in this state.

Sec. 21: makes technical changes and adds the period July 1, 2004 to June 30, 2015. New subdivision (2) adds that the provisions of this chapter do not apply to sales of any article of clothing or footwear which are less than $100.

Sec. 22: makes technical changes and adds that for income years commencing on or after January 1, 2015, the portion of such operating loss which may be deducted as an operating loss carry-over in any income year following such loss year shall be limited to the lesser of 50% of net income or the excess of such operating loss over the operating loss deductions allowable.

Sec. 23: makes technical changes and adds income year restrictions from January1, 2002 to January 1, 2015. New subdivision (2) adds that the amount of tax credits shall not exceed 50.01% of the amount of tax due from the taxpayer for any income year commencing on or after January 1, 2015.

Sec. 24: adds new subdivision (2) adding that amount of tax credits shall not exceed 50.01% of the amount of tax due from the taxpayer for any income year commencing on or after January 1, 2015.

Sec. 25: makes technical changes and adds new subdivision (3) stating that on or before the 15th of the fourth month after the close of every taxable year, each affected business entity must pay a $125 tax to the Commissioner of Revenue Services for years starting on or after January 1, 2015.

Sec. 26, 27, & 28: change the amount required to file an annual report with the Secretary of State from $20 to $100.

Sec. 29: makes technical changes and caps inclusive fiscal years at June 30, 2015. New subdivision (3) adds that disbursements from the Tobacco Settlement shall be made to the General Fund, $4 million to the Biomedical Research Trust Fund, and the remainder to the Tobacco and Health Trust Fund for the fiscal years ending June 30, 2016 and 2017. New subdivision (4) adds that disbursements from the Tobacco Settlement shall be made $6 million to the Tobacco and Health Trust Fund, $4 million to the Biomedical Research Trust Fund, the General Fund, and any remainder Tobacco and Health Trust Fund.

Sec. 30: changes the amount the Comptroller shall transfer from the General Fund to the General Transportation Fun for FY ending June 30, 2017 from $162,800,000 to $137,800,000. New subsection (g) adds that the Comptroller shall transfer $274,800,000 from the General Fund to the General Transportation fund for FY ending June 30, 2018. New subsection (h) adds that the Comptroller shall transfer $417,800,000 from the General Fund to the General Transportation fund for FY ending June 30, 2019. New subsection (i) adds that the Comptroller shall transfer $562,800,000 from the General Fund to the General Transportation fund for FY ending June 30, 2020.

Sec. 31: makes technical changes and new subsection (b) states that 50% of the funds in the community investment account shall be distributed every three months to the General Fund from January 1, 2016 to June 30, 2017.

Sec. 34: states that any registration fees collected by the Department of Consumer Protection be credited to the General Fund instead of the account established in section 21a-408q.

Sec. 35, 36, & 37: state that any fees collected by the Department of Consumer Protection be credited to the General Fund instead of the account established in section 21a-408q.

Sec. 38, 39, & 40: add that the restaurant permit shall authorize the sale of not more than four liters per person of sealed draught beer containers for consumption off the premises only during the hours a package store is permitted to sell alcoholic liquor.

Sec. 41: makes technical changes and adds keno to the definition of “lottery” and provides the definition for “Keno”.

Sec. 42: adds the introduction of keno pursuant to signed agreements from the Mashantucket Pequot and Mohegan Tribes of Connecticut.

New Sec. 43: states that the Secretary of the Office of Policy and Management may enter into separate agreements with the Mohegan and Mashantucket Pequot Tribes on behalf of the state of Connecticut concerning the operation of keno by the Connecticut Lottery Corporation, which may not operate keno until such agreements are reached.

New Sec. 44: adds that the Connecticut Lottery Corporation shall exclusively operate the sale of lottery games in the state except on the reservations.

Sec. 45: makes technical changes and adds the definition of “rental company”.

Sec. 46: makes technical changes, adds electronic cigarette liquid to the definition of “electronic nicotine delivery system”, and adds the definition of “electronic cigarette liquid”.

New Sec. 47: adds that no person in the state may sell an electronic nicotine delivery system or vapor product without a certificate from the Commissioner of Consumer Protection. On or after January 1, 2016, any person desiring a certificate must make an application to the Department of Consumer Protection who will then issue the certificate within 30 days provided the applicant has not made any false statements or broken any tax laws and all other requirements are met. The certification will be renewed annually and may be suspended or revoked at the discretion of DCP. The applicant shall pay an application fee of $75 in addition to an annual registration fee of $400. If one of the partners dies or retires, the remaining partner need not file a new application for the expired portion but if a partner is added, a new application and fees shall be required. Any person who knowingly sells an electronic nicotine delivery system shall be fined up to $50 for each day of violation, whereas if the dealer's registration has expired for less than 90 days, they shall be fined $90. No penalty shall be imposed unless the Commissioner sends written notice of any violation to the person who is the subject of the penalty and they cease such violation and comply with the requirements in 60 days.

New Sec. 48: adds that on and after March 1, 2016, no person may manufacture an electronic nicotine delivery system or vapor product unless they have obtained a certificate of manufacturer registration. On or after January 1, 2016, any person desiring a certificate shall make an application to the DCP with the certificate being issued in no more than 30 days after the application providing the applicant has not made any false statements or broken any tax laws and all other requirements are met. The certification will be renewed annually and may be suspended or revoked at the discretion of DCP. The applicant shall pay an application fee of $75 in addition to an annual registration fee of $400. If one of the partners dies or retires, the remaining partner need not file a new application for the expired portion but if a partner is added, a new application and fees shall be required. Any person who knowingly manufactures an electronic nicotine delivery system shall be fined up to $50 for each day of violation, whereas if the manufacturer's registration has expired for less than 90 days, they shall be fined $90. No penalty shall be imposed unless the Commissioner sends written notice of any violation to the person who is the subject of the penalty and they cease such violation and comply with the requirements in 60 days.

Sec. 51-72: make technical changes to the bill and adds $5 to the license renewal fee for the following professions: dentist, optometrist, midwife, dental hygienist, those practicing medicine or surgery, registered nurse, advanced practice registered nurse, practical nurse, nurse-midwife, physical therapist, physical therapist assistant, physician assistant, athletic trainer, radiographer, occupational therapist, alcohol and drug counselor, respiratory therapist, perfusionist, psychologist, marital and family therapist, master social worker, professional counselor, veterinarian, massage therapist, dietician-nutritionist, acupuncturist, paramedic, embalmer, funeral director, electrologist, audiologist, hearing instrument specialist.

Sec. 56 & 73: make technical changes to the bill.

New Sec. 74: adds that each year on or before the last day of January, April, July, and October, the Commissioner of Public Health will certify the amount of revenue received from the $5 fee increases that took effect July 1, 2015 and transfer the amount to the professional assistance program account.

New Sec. 75: establishes the professional assistance program account which shall be a separate, non-lapsing account within the General Fund and shall be expended by the Commissioner of Public Health for the purposes of providing grants-in-aid to program providers and medical review committees.

Sec. 76: makes technical changes and provides definitions for “combined group”, “combined group's net income”, “common ownership”, “unitary business”, “designated taxable member”, “group income year”, “nontaxable member”, “person”, “taxable member”, and “pass through entity”.

New Sec. 77: includes various stipulations affecting the calculation of the net income of a combined group as well as the apportionment percentage of a taxable member of a combined group and the effect these have on the filing of a combined unitary tax return.

New Sec. 78: defines “affiliated group” for the purposes of this section and concerns the designated taxable member of a combined group electing or not electing to have the combined group's net income be determined on a world-wide or affiliated group basis.

New Sec. 79: defines “net deferred tax liability” and “net deferred tax asset” and applies only to members of a unitary group that is a publicly-traded company.

Sec. 80: adds new subsection (c) which states each taxable member of a combined group required to file a combined unitary tax return pursuant to section 12-222 shall calculate the member's tax by multiplying their net income apportioned to the state, as provided in sec. 77, by the tax rate set forth in this section

Sec. 81: adds new subsection (e) stating that where a combined group is required to file a combined unitary tax return pursuant to section 12-222, the combined group's net income shall be computed as provided in subsection (a) of sec. 77. New subsection (f) states that where a combined group is required to file a combined unitary tax return pursuant to section 12-222 a taxable member's net operating loss apportioned to this state shall be deducted and carried over by the taxable member as provided in subsection (d) of sec. 77.

Sec. 82: changes the definition of “combined return” to “a combined unitary tax return under section 12-222, as amended by this act”.

Sec. 83-86: make technical changes.

Sec. 87: adds new subsection (m) in which each taxable member of a combined group required to file a combined unitary tax return shall, if one or more members of such group are taxable both within and without this state, apportion its net income as provided in subsections (b) and (c) of section 77.

Sec. 88: adds new subsection (m) in which each financial service company that is a member of a combined group required to file a combined unitary tax return shall apportion its net income as provided in subsections (b) and (c) of section 77.

Sec. 89: makes technical changes and adds new subdivision (4) stating that the adjustments required in subsection (b) shall not apply if the corporation and related member are both members of a combined group required to file a combined unitary tax return pursuant to section 12-222.

Sec. 90: makes technical changes and adds that the election for a corporation to file on a unitary basis will not be applicable to income years starting on or after January 1, 2015. New subdivision (4) adds that the corporation and related member are both members of a combined group required to file a combined unitary tax return.

Sec. 91: adds new subsection (e) stating that the additional tax base of taxable and nontaxable members of a combined group required to file a combined unitary tax return shall be calculated as provided in subsection (f) of sec. 77.

Sec. 92: states that the additional tax base of taxable and nontaxable members of a combined group required to file a combined unitary tax return shall be apportioned as provided in subsection (g) of section 77.

Sec. 93: provisions of this section shall also apply to a combined group required to file a combined unitary tax return.

Sec. 94: concerns the filing of a combined unitary tax return and the selection, responsibility, and liability of a designated taxable member.

Sec. 95: makes technical changes and adds new subsection (e) which states that the provisions of this section will not apply to income years starting on or after January 1, 2015.

Sec. 96-98: make technical changes.

Sec. 99: makes technical changes and adds new subsection (b) which states that the provisions of this section will not apply to income years starting on or after January 1, 2015.

Sec. 100: discusses the due dates of required installments and the required annual payments of a combined group.

Sec. 101: makes technical changes.

Sec. 102: makes technical changes and defines “combined revenue” for the purposes of the section. It identifies the conditions of and formula for the transfer and deposit of funds between the Budget Reserve Fund, the General Fund and the Restricted Grants Fund. It requires the Secretary of the Office of Policy and Management, the director of the Office of Fiscal Analysis, and the State Comptroller to each submit a report every 5 years which include an analysis of the deposit formula's impact. No bill reducing the amount of deposits to the Budget Reserve fund or Restricted Grants Fund may be passed by the General Assembly without a 3/5 affirmative vote from the Appropriations and Finance, Revenue and Bonding Committees.

Sec. 103: makes technical changes and adds that the Governor may direct the Treasurer to transfer funds from the Restricted Grants Fund to the General fund if the Comptroller projects a General Fund deficit greater than 1% of the total General Fund appropriations.

Sec. 104: makes technical changes and adds that there must be included in the Comptroller's report to the Governor a statement certifying the threshold level for deposits to the Budget Reserve Fund for the current fiscal year.

Sec. 105: adds that starting in FY ending June 30, 2016, the itemization in the legislature's statement of estimated revenue must include estimates for each major component of the personal income tax, namely withholding payments, estimated payments, and final payments.

Sec. 106: concerns the report on the threshold levels for deposits to the Budget Reserve Fund made the Secretary of the Office of Policy and Management and the director of the Office of Fiscal Analysis and any adjustments made to the threshold level for deposits.

Sec. 107: states that if the bill has any impact on the personal income tax and/or corporation business tax, the fiscal note should clearly identify the resulting impact on the deposits to the Budget Reserve Fund.

Sec. 108: defines “corporation”, “city”, “project”, and “incremental sales tax”. Requires Connecticut Innovations, Inc. to issue Tax Increment Financing bonds to support development in downtown north Hartford, which would result in a state General Fund cost to service the debt in the future.

RESPONSE FROM ADMINISTRATION/AGENCY:

Benjamin Barnes, Secretary of the Office of Policy Management

Secretary Barnes supports this bill. He describes this proposal as a balanced budget that focuses on the Governor's priorities over the last four years. According to the Secretary's testimony the General Fund revenue would increase by $465.7 million in FY 16 and $269.8 million in FY 17 and Transportation Fund revenue would also increase in the out years with a corresponding decrease in the General Fund.

He also discussed proposed tax cuts in this budget. The sales tax rate, currently at 6.35%, will be lowered to 6.2% on November 1st FY 15 and then lowered to 5.95% on April 1st FY 17. The proposal also has the removal of the Business Entity Tax. The revenue losses from these tax cuts are offset by the closing of tax loopholes, the elimination of tax exemptions and increase in service fees such as the Solid Waste Disposal Fee. According to Secretary Barnes's testimony this will lead to revenue changes of $558 million in FY 16 and $357 million in FY 17.

NATURE AND SOURCES OF SUPPORT:

Total Wine & More support several sections of the bill, specifically sections 41, 42(d) and 43. Increasing the amount of permits allowed from 3 to 6 would help Connecticut be more competitive with surrounding states, as Massachusetts has 9. It also allows for greater transparency with respect to ownership interests. Currently, if an individual wishes to have more than three permits, they could form a separate corporation that would be the permit holders, obscuring the legal ownership structure.

Expansion of business hours would bring Connecticut more in line with its neighboring states while also helping consumers by accommodating their busier schedules. New York's package stores are permitted to stay open until midnight and Massachusetts allows until 11 pm.

Removing the Minimum Bottle Pricing would “eliminate artificially inflated prices” that are placed on consumers. Minimum bottle pricing is an inflated price that is placed on consumers. This puts Connecticut at a disadvantage with neighboring states that don't impose that cost.

Distilled Spirits Council of the United States (DISCUS) supports sections 41, 42 and 43 of the bill stating that these sections continue to modernize Connecticut's beverage laws. The elimination of minimum bottle pricing would help bring the state in line with its neighbors while the expansion of business hours could bring up to one million dollars into the state's coffers.

Minimum bottle pricing forces retailers to sell at an artificial minimum price, restricting the free market. The reduction of price could lead to an increase in sales as Connecticut would compete with surrounding states more. This could lead to additional revenue of between $5.1 million and $8.1 million in sales and excise tax. Connecticut is also the only state in the country that uses a minimum bottle pricing scheme.

NATURE AND SOURCES OF OPPOSITION:

Leo Paul, First Selectman, Town of Litchfield is in opposition of this legislation. Passage of this bill would require towns to pay for 100% of the cost of the Resident State Trooper program. This would force towns to shrink or abandon the program, forcing the state to assume the costs associated with providing public safety in smaller communities.

Donald S. Stein, First Selectman, Town of Barkhamsted opposes SB 946. The Northwest Hills COG relies on the Resident Trooper Program for the policing of all their communities. The proposed increase will impact the Barkhamsted budget by over $61,000, representing an increase of 3% in their General Government budget. Requiring towns to pick up 100% of the cost will undermine public safety in smaller communities or force towns to substantially increase property taxes.

Matt Galligan, Town Manager of South Windsor is opposed to SB 946 unless amended. This bill would mandate that towns pay 100% of the cost for the Resident State Trooper Program, increase fees for the disposal of solid waste, sweep funding from the Community Investment and Municipal Video Competition. SB 946 contains sections that would compound the problems facing Connecticut's towns and cities.

Michael Criss, First Selectman, Town of Harwinton opposes this bill. Mandating that municipalities pay 100% of the costs of the Resident State Trooper Program means in increase in property taxes. It is recommended that the Finance Committee amend the language to help offset the costs on municipalities and maintain the current local-state funding structure.

Connecticut United for Research Excellence (CURE) is opposed to the reduction of tax credits language in SB 946. These reductions would affect the ability of biotech and pharmaceutical companies to utilize research and development funding. Limiting the ability of businesses to utilize these credits sends the wrong message to these companies.

Connecticut Small Brand Council (CSBC) is in opposition of SB 946. Repealing minimum pricing and increasing the number of permits from three to six allows big-box retailers to drive out local package stores. Many of Connecticut's stores did not see in increase in sales since Sunday Sales went into effect.

Connecticut State Grange opposes Section 28 of this legislation, which diverts funds from the Community Investment Act. These funds support important programs and land conservation within the Department of Agriculture. Losing this money would force DEEP to use more bond funds to complete their projects.

Connecticut Voices For Children oppose this bill. They consider the taxes to be unfair and short-sighted. The cuts hurt the increase the burden on the families that have less. They cited an OFA report from 2014 that stated “households earning between $5,533 and $ 16,245 per year pay an effective overall tax rate of over 26 percent.” Raising revenue would be a better option than balancing the budget on those in need.

Working Lands Alliance strongly opposes section 29B of the bill. This section sweeps funds from the Community Investment Act to the General Fund for two years, which is unprecedented and would have a devastating effect on land preservation. The complete sweep of these funds would threaten many CIA investments that are pending across the state.

James A. Smith spoke in opposition to the sweeping of funds from the Community Investment Act. The CIA is an important program and is the reason there is still a dairy industry in Connecticut. The money from the CIA also stimulates the local economy because it is being passed on to local vendors as well. These cuts would devastate the industry.

Robert E Halstead, City Councilman, Bridgeport is opposed to the sweeping of funds from the Community Investment Act. Bridgeport has many abandoned historic buildings that rely on government funding to help cover development costs. CIA funding also enables municipalities to purchase open space and increase quality of life.

Connecticut Package Stores Association (CPSA) opposes sections 41, 42 and 43 of this legislation. Most stored did not see an increase of sales when Sunday Sales was instituted. Being allowed to stay open later would not help. Approximately $66 million in additional sales would be needed to replace the loss of $4.1 million due to the removal of minimum bottle pricing.

Robert D. Wellington of Agri-Mark Dairy Cooperative is concerned about the loss of funds to the Agricultural Sustainability Account and the Dairy Farmer Support Program. Farm milk prices are plummeting and this is a problem faced across the Northeast. These funds help keep he dairy industry viable.

Amanda Freund, Freund's Farm opposes the removal of funds from the Dairy Sustainability Program. The program has halted the decline of dairy farms in the state and lessens the impact that price volatility has on dairy farms.

Rachel Freund, Freund's Farm is opposed to removing funds from the Community Investment Act. Dairy farms make less profit for their investment than any other industry in Connecticut

Dan McIntyre, President of Charlotte Hungerford Hospital opposes using the hospital tax to divert funds to the General Fund. The funds are supposed to be used to care for the sick, not solve a budget issue.

Pua Ford, Media Issues Specialist, League of Women Voters opposes sections 34 and 35 of this legislation which sweeps all the funds from PEGPETIA into the General Fund. Communities have no meaningful way to cover the operating and capital costs if funds are cut.

Amy Blaymore, Executive Director, Connecticut Land Conservation Council (CLCC) is opposed to the sweeping of funds from the Community Investment Act. CLCC works with Connecticut's land trusts to assure high quality stewardship of conserved lands in the state. The CIA is the only consistent source of funding to the State's Open Space and Watershed Land Acquisition Grant Program. These cuts would put a halt on investments for new projects and upset funding for programs already in place.

Leah S. Glaser, Associate Professor, Central Connecticut State University strongly opposes removal of funds from the Community Investment Act. The CIA includes the amenities that retain and attract permanent residents such as open spaces, historical resources that define the state, farmland and affordable housing. Removal of these funds and programs hampers the state's ability to bring in new residents.

Bonnie Stewart, CBIA opposes the removal of business property tax credits. Reducing these credits hampers businesses from investing in research and development, hiring new workers or from moving into the state. Removal of these tax credits is equivalent to a tax increase. These credits are good for Connecticut because they create long-term jobs as well as economic stability.

Matthew Peckham, Elm Farm LLC testified against the removal of funds from the Community Investment Act. The unprecedented removal of these funds would undermine the investment and progress the CIA has made in Connecticut's rural communities over the past 10 years. Connecticut's dairy industry, which stands at $1.1 billion, would be crippled without CIA funding. The programs that the CIA funds are numerous and all are important to the states viability.

South Central Connecticut Regional Water Authority is opposed to Section 29 which sweeps revenue from the Community Investment Act. They RWA is involved in the protection of over 1,200 acres in the state that were acquired with help from the Open Space Grants offered by the state. Many of these transactions would not have occurred without these funds. Removal of these funds lessens the ability to preserve land and open space.

Kies Orr, Fort Hill Farms does not want to see funds removed from the Community Investment Act. Due to milk prices being set on the national level dairy farms in the Northeast are at a disadvantage compared to farms in the Midwest. The cost of operation is higher in the Northeast and limits the amount of profit a farm can make. The CIA helps offset these costs and helps keep dairy farms from Connecticut viable.

Jane McNichol, Legal Assistance Resource Center opposes the structure of the Governor's budget. The placing of most of the cuts on human services and the agencies that support needy residents in not a budget that shares the burden of recovery. These cuts will also remove 34,000 parents out of HUSKY care, weaken the husky provider network and reduce the number of state employees that offer services to residents. This budget proposal places a significant burden on low-income residents but asks little from the individuals and businesses with resources in the state.

David Sutherland, The Nature Conservancy expressed strong opposition to the budget proposal and the removal of Community Investment Act funds. The CIA is not funded by taxes, but by fees that property owners pay with the understanding that the revenues go towards protecting those crucial resources that are most often affected by real estate activity. The programs funded by the CIA create on-the-ground jobs and the type of communities that attract businesses and residents. Connecticut still ranks far behind its neighboring states in the amount of state-owned parks and forests. Connecticut needs to keep the CIA funded to help slow the fastest loss of farmland in the nation.

George Massey, Salisbury Land Trust doesn't want to see funds removed from the Community Investment act. It is essential not to neglect open space, fair housing and land conservation in these tough fiscal times.

Catherine Rees, Middlesex Hospital opposes the expansion of the hospital tax to $514.4 million per year. Middlesex Hospital will face a net loss from their 2012 tax arrangement with the State and with this proposed budget that number could reach $34.5 million. Hospitals have been forced to close critical clinical services and important community programs, eliminate jobs and shifting cost to employees. The continual fiscal assault by the state continues to threaten, and has, negatively affected community health and well-being.

James Jacquier knows what an important role the funds from the Community Investment Act are and opposes the removal of said funds. The CIA has played a significant role in providing payments to farmers for the true costs of milk production in the state.

Stephen Frayne, Connecticut Hospital Association testified in opposition of SB 946. In 2012, when the hospital tax was imposed, hospitals where told they would get back their money plus some. The same promises are being made to hospitals but they weren't fulfilled the last time they were made. This budget would also reduce hospitals' ability to purchase tax credits. The ongoing cuts and expansion of taxes are eroding hospitals, causing patient care and access to suffer.

Rose-Scoot Long Rothbart is in opposition of the depletion of funds that are associated with the Community Investment Act. The CIA has provided numerous economic benefits to building trades, property owners and communities themselves. The funds have enabled organizations to hire qualified professionals to conduct research surveys and work on land preservation. This preservation process has been proven to support the economy of the communities within the state.

Seth Ruzi, Starwood Hotels and Resorts voiced his opposition to SB 946. Impairing the marketability of URA Tax Credits hurts economic development in the state. Once this program is lost, it is hard to recover. Tax credits are not “tax loopholes”, it is the state holding up its end of a successful business deal.

Louis Lipton, Pleasant View Farms opposes cuts that are detrimental to the farm industries sustainability. The Agricultural Sustainability Account is a key program to all CT agriculture and gives the state a brand that stands out. This would not have been possible without these funds.

Jude Carroll, Connecticut Housing Coalition opposes parts of SB 946 that would cut or eliminate funding to the Community Investment Act by moving them to the General Fund. CIA funding supports local municipalities along with projects in the Department of Agriculture, Environmental Protection and Economic and Community Development. Housing Connections is another program that provides an array of supports to local officials and resident groups related to planning and project development.

Lawrence & Memorial Hospital oppose the millions of dollars in funding cuts and tax increases placed on Connecticut's hospitals in the proposed legislation. Recent state fiscal policies have taken hospitals with many consecutive years of positive bottom lines and put them in the red the last two years.

The New Haven Preservation Trust (NHPT) is in strong opposition to section 29 of SB 946. NHPT almost closed their doors in 2007 due to a lack of operating funds but grants provided through the CIA have allowed them to continue operating, expand their staff and help serve the community. NHPT was also able to complete a survey of a 125 Modernist buildings constructed between 1930 and 1980. These accomplishments would not have been possible without these funds.

Wesleyan University is in opposition of the elimination of funds to the Bio Medical Research Fund. Bio Medical Research plays a vital function in the state particularly in the light of the declining budget of the National Institutes of Health, which is the primary federal source of support for biomedical research. These funds also support job growth in state through the hiring of under-graduate and graduate students and encouraging these individuals to stay in state.

Tod Bryant opposes the diversion of funds from the Community Investment Act. At its heart the CIA is a jobs program and defunding it will cost Connecticut thousands of current and future jobs. Projects that are supported by the CIA also result in increased community pride in towns and cities. When the CIA funds are used to rehabilitate abandoned buildings, those buildings end up back on the tax rolls and provide revenue back to the municipalities.

Richard N. Platt, Milford Public Trust opposes the diversion of funds from the Community Investment Act. The CIA is not funded by tax payers so the funds should go to their intended use. Removal of these funds amounts to a “raid” on a special dedicated fund that was established so that there would not be any burden on taxpayers.

Timothy Beeble opposes the diversion of funds from the Community Investment Act. Whenever the Legislature establishes a dedicated stream of funding for a particular program and the Governor proposes diverting the funds to balance the budget, this is a breach of public trust. The funds for the CIA should be placed in a lock box so they are only used for the purpose of the funds.

Ruth Canovi, American Lung Association expressed strong opposition to the elimination of funding to the Tobacco and Health Trust Fund Transfer in the FY 16/17 Budget. Connecticut will receive over $500 million in tobacco taxes and Masters Settlement dollars and it is unconscionable that the state wouldn't spend any of those dollars on helping the smokers who want to quit. The Tobacco and Health Fund Trust is a vital source for tobacco prevention and cessation program funding in the state. Not only is funding tobacco cessation and prevention programs good public health policy, it is a wise investment.

Henry Talmage, Executive Director, Connecticut Farm Bureau Association the Connecticut Farm Bureau Association is in opposition to this bill because of the cuts to the Department of Agriculture programs through the Community Investment Act (CIA). Because this bill diverts CIA funds for the second half of FY 2016 and all of FY 2017, Connecticut small farms would suffer and find it hard to compete with larger farms from lower cost areas.

Don Tuller, President, Connecticut Farm Bureau Association is opposed to the bill, particularly the cuts to the Community Investment Act and Agricultural Sustainability Act. He states that the CIA has been doing “just what it was supposed to” by helping to stabilize the dairy industry, staffing the CT Farmland Preservation Program, and helping farmers prepare for future challenges, and that this funding is critical for Connecticut farmers.

Paul Miller, Owner, Fairvue Farms LLC is in opposition to the bill because of cuts to the CIA, which were not intended to be used to balance the budget. He claims that these cuts come at an especially inconvenient time, with the price of milk paid to farmers decreasing by 40% and the increase in the minimum wage.

David Jacquier, Elm Knoll Farm is opposed to the cuts to the Agricultural Sustainability Account, as it is a “lifeline” to Connecticut dairy farmers at a time where dairy prices are decreasing.

Patty Sullivan, Administrative Director for Ancillary Services, Charlotte Hungerford Hospital is against the bill because they state that it has had direct impacts on essential services, staffing levels, and increased pressure on physicians to reduce prescribing new therapies for their patients. They state that it also affects the scope and availability of outpatient services and the reduction and/or elimination of programs needed for the elderly, children, and chronically ill populations.

John Simone, President & CEO, Connecticut Main Street Center (CMSC) is opposed to the “total sweep” of CIA funds as it would cause an economic step backwards as well as compromise the state's “most charming” characteristics. For CMSC, the passage of this bill would end the Preservation of Place grant program which has helped revitalize a number of downtown areas, Putnam in particular. The CIA also funds their “award-winning” Come Home to Downtown program which offers assistance and guidance in rehabilitating underutilized downtown properties into housing above commercial space. They view a “lock box” on the CIA as just as important as that put on the transportation revenues.

Kathleen Maher, Executive Director, The Barnum Museum opposes this bill because without CIA funding, its future is uncertain. CIA support was critical in the repair of the building after the 2010 EF1 tornado and Hurricanes Irene and Sandy.

Linda Auger, Co-Owner, Taylor Brooke Winery opposes this bill because of all the benefits that CIA funds have brought to the Connecticut wine industry. She states that her own vineyard was able to expand with CIA grants which have also helped fund the CT Wine development council and The Passport to Connecticut Farm Wineries, both of which have been instrumental in the growth and popularity of Connecticut wineries.

Ned Ellis, Mapleleaf Farm opposes the bill because of the provision diverting CIA unspent and future funds to the General Fund. He claims that CIA grants have been have provided a safety net for dairy farmers in the very volatile milk market.

Betsy Gara, Executive Director, Connecticut Council of Small Towns (COST) is against the provisions of the bill that shift the cost of Resident State Trooper programs onto towns and their property taxpayers, sweep revenues from the CIA, and increase the solid waste tax. They state that requiring towns to pay 100% of the cost for their resident state trooper will cost both the towns and state money. Since troopers are routinely called away from the town they are stationed in, many towns could drop the program, not wanting to pay for 100% for a trooper who isn't there all the time, returning the full cost of the troopers to the state. They urge that this program is crucial to small towns and benefits both the local and state budgets with the current arrangement.

Doug Carlson & Sandy Boardman, Carlwood Farm LLC oppose the provisions of the bill that take away from the Dairy Support Program, which has helped the farm “catch up” on late bills, and the Farmland Preservation Program, which helped their family make much needed improvements that were never able to be done for lack of money. They hope that the farm will continue to be operated and passed down to future generations.

Carol Platt Liebau, President, Yankee Institute for Public Policy opposes this bill and any tax increases within it. They warn against raising taxes on the rich as a long-term solution and petition the committee to eliminate tax credits rather than offer a lower overall rate in order to provide businesses with a greater degree of predictability. They oppose the increase in the hospital tax and encourage a decrease in the corporate tax rate.

Mary DeCroce, President, Southington Community Cultural Arts opposes the elimination of funding to the CIA grants, citing her success in the renovation of the current Art Center in Southington, which would not have been possible without the help of CIA grants.

Brooke Cheney, The Cheney Family Farm strongly opposes the sweeping of unspent CIA funds into the General fund stating that she promotes her pick your own blueberry business through the Connecticut Grown program. She also opposes the sweeping of any special funds into the General Fund and suggests consolidating Connecticut's “many redundant programs and services” to help fix the budget problem.

Mimi Findlay, Board Member, Lockwood-Mathews Mansion Museum of Norwalk Inc. is opposed to the removal of CIA funds from their special account into the General Fund and urges the elimination of the proposed revision to Section 29. She states she has seen many benefit from CIA funds: the Lockwood-Mathews Mansion Museum used CIA funds for multiple repairs, the New Canaan Preservation alliance used them to stop a wave of “tear-downs”, and the Keiser Family Land Easement program used them to protect the Norwalk River. She states that CIA funds also help revitalize downtown areas and are one of the most far-sighted laws passed in recent memory.

Michael Scalise, Broadway Wine and Spirits is opposed to the provisions of the bill increasing minimum pricing on alcoholic beverages stating that businesses need to make a profit and this will not bring any additional revenue. He states that changing the minimum pricing will only benefit larger chains and harm local independent retailers.

Reported by: Ben Dwyer

Date: May 4, 2015