*Finance, Revenue and Bonding Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-787

Title:

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

Vote Date:

4/27/2017

Vote Action:

Joint Favorable Substitute

PH Date:

3/9/2017

File No.:

SPONSORS OF BILL:

Introduced by:

Sen. Martin M. Looney, 11th Dist.
Sen. Bob Duff, 25th Dist.

Rep. Joe Aresimowicz, 30th Dist.

Rep. Matthew Ritter, 1st Dist.

REASONS FOR BILL:

To implement the Governor's budget recommendations.

RESPONSE FROM ADMINISTRATION/AGENCY:

BENJAMIN BARNES, SECRETARY OF THE OFFICE OF POLICY AND MANAGEMENT

Secretary Barnes testified in favor of SB 787 noting that the bill contains the major revenue elements of the Governor's plan for the 2018- 2019 biennial budget. Sec. Barnes explained that according to this proposal General Fund revenue would increase by $279.2 million in FY 2018 and by $237.7 million in FY 2019 and Special Transportation Fund revenue would decrease by $7.0 million in FY 2018 and by $7.8 million in FY 2019. His testimony goes on to briefly describe sections 1-60 of the bill.

COMMISSIONER RODERICK BREMBY-DEPARTMENT OF SOCIAL SERVICES:

Commissioner Bremby supports Sections 42 through 58 of this bill, as they relate to the state's health care provider taxes. His testimony points out that the federal Medicaid statute and regulations require each state's health care provider taxes to comply with various rules and compliance with these federal rules is important to protect the state against potential federal penalties.

NATURE AND SOURCES OF SUPPORT:

MARY MORAN BOUDREAU-EXECUTIVE DIRECTOR OF THE CONNECTICUT ORAL HEALTH INITIATIVE

Ms. Boudreau testified in support of Sections 13 and 16 of SB 787 which address taxes on tobacco products. The CT Oral Health Initiative believes that increasing the cigarette tax from $3.90/pack to $4.35/pack, increasing the tax on snuff from $1/ounce to $3/ounce and increasing the cap on cigar taxes from $0.50/cigar to $1.50/cigar will reduce the incidence of oral disease caused by these products.

RUTH CANOVI-AMERICAN LUNG ASSOCIATION, DIRECTOR OF PUBLIC POLICY

Ms. Canovi testified in support of SB 787 noting the increase in revenue which would result from additional tobacco taxation as proposed in this bill. It is her belief that paired with the tobacco control program funding in the state as was proposed by the Governor, a significant tax increase can help protect and promote the state's public and economic health against the great toll deadly products such as cigarettes take on us all.

ALISON COOPER- VICE PRESIDENT-AMERICAN INSURANCE ASSOCIATION

Ms. Cooper testified in strong support of section 2 of SB 787 which would reduce the insurance premium tax credit from 1.75% to 1.5%. She goes on to explain that the Governor's proposal to reduce the insurance premium tax credit is significant because it serves as recognition of the critically important role that the insurance industry plays in the state and local economy. Insurance companies are major employers in the State, providing good quality jobs for thousands of people and also contributing greatly to the tax base. It is her opinion that reducing the insurance premium tax credit is a positive step in the right direction that will undoubtedly help to cultivate and support the industry.

AMERICAN CANCER SOCIETY-CANCER ACTION NETWORK

The American Cancer Society (ACS) is pleased the Governor is proposing to increase taxation on cigarettes, weight-based tobacco products and cigars, however his plan is a missed opportunity because it leaves out an entire class of tobacco products that are taxed according to their wholesale value. Furthermore, the Governor's plan doesn't address unequal taxation of different tobacco products/categories that result in reduced revenue as well as reduced health benefits for the state.

MARK BERNACKI-CT TOWN CLERKS ASSOCIATION, INC.

The Connecticut Town Clerks Association is supportive of Section 20 of SB 787. Any new revenue is positive for the Town Clerks as they further attempt to preserve and protect all of their historic documents; land records, birth records, marriage records, death records and all other documents deemed permanent by the Connecticut Library.

LOUISE DICOCCO-COUNSEL FOR THE CONNECTICUT BUSINESS AND INDUSTRY ASSOCIATION

Ms. DiCocco testified in support of aspects of SB 787, namely the scheduled reduction of the 20% corporate surcharge tax which will drop to 10% in 2018, the scheduled phased-in increase of the cap on tax credits for research and development and industrial site reinvestment, lowering the tax in insurance premiums from 1.75% to 1.5% and lastly the estate tax exemption being phased in over a three year period to match the federal estate tax exemption.

KEVIN DILLON: EXECUTIVE DIRECTOR OF THE CONNECTICUT AIRPORT AUTHORITY

Mr. Dillon testified in support of SB 787 specifically section 23 stating that it is very important for the safety and effective operation of the Airport Authority's five general aviation airports, which includes Danielson, Groton-New London, Hartford-Brainard, Waterbury-Oxford, and Windham airports. Section 23 of the bill proposes establishing the “Connecticut Airport & Aviation Account” as a separate, nonlapsing account, with funding to be provided by a percentage of the gross receipts tax on aviation fuel. This funding would be directed from the DOT to the Airport Authority for airport and aviation-related purposes, including the operation of the Authority's airports.

ERIC GEORGE-PRESIDENT OF THE INSURANCE ASSOCIATION OF CONNECTICUT

Mr. George testified in support of the premium tax provisions contained in SB 787. It is the Insurance Association's opinion that reducing the premium tax would help make Connecticut's insurers more competitive in states where they are currently paying “retaliatory taxes” by reducing the cost of doing business in those other states.

DEBRA JOHNSON, MD: PRESIDENT OF THE AMERICAN SOCIETY OF PLASTIC SURGEONS

Doctor Johnson testified in support of SB 787 noting that it would repeal the tax on ambulatory surgery centers on July 1, 2017. She goes on to explain that the tax on such centers threatens years of progress toward making health care more affordable and accessible in Connecticut.

RICHARD A. MARONE: CHAIR OF THE CONNECTICUT BAR ASSOCIATION'S ESTATES & PROBATE SECTION

Mr. Marone testified in support of sections 10, 11 & 12 of SB 787. The Bar Association believes that a change in the Connecticut estate tax to match the exemption to the federal exemption among other things would simplify the compliance burden for Connecticut's citizens. In short The Estates and Probate Section of the Connecticut Bar Association urges the implementation of an increase in the Connecticut estate tax exemption to match the federal estate tax exemption.

THE NATIONAL FEDERATION OF INDEPENDENT BUSINESS (NFIB)

The NFIB supports the following sections of SB 787:

Section 4 - which would reduce the annual insurance premium tax on domestic insurers in Connecticut.

Section 10 - which would increase the state estate tax exemption in order to match the federal exemption over the next few years. Paralleling Connecticut's estate tax calculations with the Internal Revenue Code can help with succession planning for many of Connecticut's closely-held small and family businesses.

THE CONNECTICUT ASSOCIATION OF HEALTH PLANS

The CT Association of Health Plans testified in support of the premium tax provisions of SB 787. The Association applauds the Governor for recognizing both the value of the insurance industry to Connecticut and the extraordinary competitive and market pressures insurers confront every day. By implementing the premium tax provisions in SB 787, Connecticut insurers now liable for potentially significant retaliatory taxes levied by other states will see a reduction in their cost of doing business. The arcane nature of retaliatory taxes is rather hard to capture in a brief piece of testimony, but insurance is state-regulated and taxes on premiums vary by state. These variations are “settled” via retaliatory taxes, in which companies from states with relatively high premium tax rates pay extra tax to states with lower premium tax rates. In short, because CT is a relatively high premium tax state, reducing Connecticut's rate is a good thing for Connecticut companies competing in other states.

NATURE AND SOURCES OF OPPOSITION:

CT STATE REPRESENTATIVE SAM BELSITO, 53RD ASSEMBLY DISTRICT

Rep. Belsito testified in opposition to SB 787 and specifically section 19 for the simple reason that it unwarrantedly singles out the law abiding gun owners of the state of Connecticut by dramatically raising pistol fee registrations from $70 to $300 or $140 to $370.

CT STATE REPRESENTATIVE CHARLES FERRARO, 117TH ASSEMBLY DISTRICT

Rep. Ferraro testified in opposition to SB 787 specifically section 19 which increases the cost to make a first time purchase, and renewal of a pistol permit. In his opinion this proposal unfairly targets people who choose to exercise the rights given to them by the United States Constitution. He also states that it is unethical of any elected official to impose a fee increase of 400% on anything, let alone an inalienable right given to each of us via the United States Constitution.

CONNECTICUT SURGERY CENTER

In terms of the ambulatory center portion of the bill the Connecticut Surgery Center believes that this proposal will result in a reduction in healthcare access, as patients may have no choice but to go to the hospitals for service instead of ambulatory centers, where the same services could be delivered but at less cost.

CT ASSOCIATION OF AMBULATORY SURGERY CENTERS/ DANBURY SURGICAL CENTER/SURGERY CENTER OF FAIRFIELD COUNTY

The Association of Ambulatory Surgery Centers submitted testimony specific to the 6% gross receipts provider tax imposed on Connecticut's ambulatory surgery centers (ASCs).Innovative and cost-effective treatment is what health care professionals strive to provide their patients. Unfortunately, the decision to impose a 6% gross receipts provider tax on ASCs makes that goal much harder to reach for the community-based Ambulatory Surgery Centers (ASCs) around the state.

DAY KIMBALL HEALTHCARE/GRIFFIN HOSPITAL

SB 787 as drafted makes modifications to the existing hospital tax and, specifically, increases the base year upon which hospitals are taxed, thereby increasing the hospital tax – an additional $1.7 million annual impact for Day Kimball/Griffin Hospital. SB 787 also eliminates hospitals' ability to use the tax credits they already purchased and to purchase and use tax credits in the future. In addition, HB 7050 as drafted establishes yet another tax on hospitals. It involves a scheme to eliminate Hospital's real property tax exemption, and lets municipalities tax them. Allowing municipalities to levy property taxes on hospitals could add over $800,000 more to Day Kimball/Griffin's overall tax burden. Day Kimball/Griffin are the cornerstones of their community. They provide good jobs and are a literal lifeline to the people they serve. They need healthcare policies that are sustainable and improve the quality and access to care, not more taxes that are just bad policy.

DISTILLED SPIRITS COUNCIL

The Distilled Spirits Council submitted testimony regarding the minimum pricing portion of SB 787. It is the Council's opinion that minimum pricing in Connecticut prevents price competition and causes higher retail prices, reduces retail sales and state tax revenues and that removing the minimum pricing requirement would increase state excise and sales tax revenue by $5.2 to $8.1 million annually.

STATE REPRESENTATIVE CRAIG FISHBEIN, 90TH ASSEMBLY DISTRICT

Rep. Fishbein testified in opposition to SB 787 noting that it would unfairly raise the pistol permit fees from $140 to $370 and raise the renewal fee from $70 to $300. He also points out that the Governor's office claims that this would put Connecticut in line with New York City's fees yet this proposal is way above the fees the surrounding states charge for their permits.

CONNECTICUT STATE REPRESENTATIVE KEVIN SKULCZYCK, 45TH ASSEMBLY DISTRICT

Rep. Skulczyck testified in opposition to section 19 of SB 787 stating that it unjustly increases the pistol registration fees from $70 to $300 or $140 to $370. He goes on to explain that this proposal is not an attempt to bring our registration fees more into line with other states or an effort to increase revenue. Rather, Section 19 of SB 787 is back door gun legislation hidden away in a budget bill which once again targets the state's gun legal owners.

CONNECTICUT STATE REPRESENTATIVE PRASAD SRINIVASAN, 31ST ASSEMBLY DISTRICT

Rep. Srinivasan testified against SB 787 specifically noting his opposition to the gun permit fee increase and ambulatory care center tax increase in the bill. In regards to the increase in gun permits Rep. Srinivasan states that the increase in fees is excessive and not in line with other neighboring states. In terms of the ambulatory center portion of the bill he believes that this proposal will result in a reduction in healthcare access, as patients may have no choice but to go to the hospitals for service instead of ambulatory centers, where the same services could be delivered but at less cost.

JOE HORVATH, ASSISTANT POLICY DIRECTOR FOR YANKEE INSTITUTE FOR PUBLIC POLICY

Mr. Horvath testified both in favor and opposed to various aspects of SB 787 as detailed below.

IN FAVOR:

● Eliminating minimum bottle pricing

● Adopting the federal estate and gift tax exemption levels

● Insurance premium tax reduction

● Continued adjustments to film tax credits

REJECT:

● Increase to the bottle deposit

● Increase to municipal land record-keeping user fees

● Increase to the price of background checks

● Increase to the price of pistol permit applications and renewals

● Tobacco tax increases

ROBERT D. SOULE, JR. – NRA CERTIFIED INSTRUCTOR

Mr. Soule opposes the pistol permit fee increase portion of SB 787 noting that it would negatively impact the law-abiding, poor and fixed income citizens of Connecticut.

CONNECTICUT STATE REPRESENTATIVE NICOLE KLARIDES-DITRIA, 105TH ASSEMBLY DISTRICT

Rep. Klarides-Ditria testified in opposition to SB 787 and specifically section 19 for the simple reason that it unwarrantedly singles out the law abiding gun owners of the state of Connecticut by dramatically raising pistol fee registrations from $70 to $300 or $140 to $370.

DAVID ADAMETZ-CHAIRMAN, KILLINGWORTH REPUBLICAN TOWN COMMITTEE

Mr. Adametz testified in opposition to SB 787 noting the financial damage the proposal will do to the residents of Killingworth and the arbitrariness of the pistol permit fee increase.

HARTFORD DISTRIBUTORS INC.

Hartford Distributors Inc. (HDI) opposes the increase in the bottle bill deposit from 5 per bottle to 10 per bottle which is set forth in Section 3 of Governor's Bill 787. The Hartford Distributors believes that this proposal will negatively impact many Connecticut businesses – including all beer wholesalers and all package stores that are located near our borders with Rhode Island, Massachusetts and New York.

KURT BARWIS-PRESIDENT AND CHIEF EXECUTIVE OFFICER OF BRISTOL HOSPITAL AND HEALTH CARE GROUP

Mr. Barwis opposes SB 787 stating that the proposal would increase the current hospital tax by more than $761,000 per year while adding a new property tax costing another $1.9 million per year. Bristol Hospital is known for being one of the best high-quality, low-cost hospitals in Connecticut and this proposal if approved would affect both of those aspects greatly.

RICH BURGESS-PRESIDENT OF CONNECTICUT CARRY

Mr. Burgess opposes SB 787 and offers the following proposals: (1) Remove pistol permitting responsibilities entirely from municipalities- all permits would be issued directly, the same day at the Special Licensing and Firearms Unit (SLFU) at DESPP headquarters in Middletown, Connecticut for a flat application fee of $100 which includes the $16.75 IAFIS query fee.

SLFU already conducts the same IAFIS checks and their own instant in-house state conviction history database search immediately when an application is submitted. Pistol permit issuance times are thus decreased from months to a few hours, reducing employee processing expense, time and effort. (2) Remove any and all 'suitability' requirements from the Connecticut General Statutes, which are catch-all's that allow local issuing authorities to deny people their right to armed self-defense on arbitrary and capricious grounds, which are often overturned on appeal at the Board of Firearms Permit Examiners.

LAWRENCE CAFERO-EXECUTIVE DIRECTOR & GENERAL COUNSEL OF WINE & SPIRITS WHOLESALERS OF CONNECTICUT

Mr. Cafero testified in opposition to section 21 of SB 787 which seeks to allow package stores to sell alcohol at a price equal to its cost, irrespective of when purchased. According to Mr. Cafero this change in state statute would be devastating to most local family owned CT package stores as they, because of their size, will not be able to take advantage of inventory buying opportunities because they don't have the space to store the inventory nor do they have the capital to buy large quantities at once.

KEVIN S. DIETLY: PRINCIPAL AT NORTHBRIDGE ENVIRONMENTAL MANAGEMENT CONSULTANTS

Mr. Dietly opposes SB 787 as it proposes to double the beverage container deposit to $0.10. Doubling the deposit will not generate the hoped for $12 million in additional revenue; in fact it is more likely that creating Connecticut as a 10 deposit “island” in New England would result in so much cross-border redemption that the state would actually lose revenue.

HELENE FIGUEROA: DIRECTOR OF CHILD CARE AT CSEA SEIU

Ms. Figueroa is in opposition to SB 787 as it aims to eliminate the tax credits for low & middle income households and decreases access to work for low-income people who rely on the child care subsidy program, care 4 kids.

KEVIN FLEMING-RETIRED POLICE SERGEANT & FORMER REGIONAL MUNICIPAL S.W.A.T. TEAM LEADER

Mr. Fleming is in opposition to SB 787 which proposes an increase in pistol permit fees and renewals. He feels that the proposed pistol permit fee increase is nothing other than thinly disguised gun control. It will hurt CT residents, especially the less wealthy among us.

STEPHEN A. FRAYNE-SENIOR VICE PRESIDENT, HEALTH POLICY, CONNECTICUT HOSPITAL ASSOCIATION (CHA)

Mr. Frayne is in opposition to sections 42-60 of SB 787. He opens his testimony by pointing out that Connecticut hospitals provide high quality care for everyone, regardless of ability to pay. Connecticut hospitals are finding innovative solutions to integrate and coordinate care to better serve patients and communities, as well as achieve health equity. These dynamic, complex organizations are working to build a healthier Connecticut. That means building a healthy economy, community, and healthcare system. By investing in the future of Connecticut's healthcare and hospitals, rather than continuing to cut away at them, we will strengthen our economy, put communities to work, and deliver affordable care that Connecticut families deserve. Sections 42 thru 60 of the bill essentially repeal the current provider tax rules and institute new rules effective July 1, 2017. The changes in Mr. Frayne's opinion are numerous and problematic.

F. SCOTT GRAY, MD: PRESIDENT OF THE CONNECTICUT ORTHOPEDIC SOCIETY

Mr. Gray stands in opposition to sections 43 to 46 of SB 787 primarily as they relates to the ambulatory surgery center tax. These sections would effectively eliminate the $1 million exemption rule in the current statute and further increase the tax burden on these ASC's. These facilities employ thousands of highly-skilled and dedicated employees, and furnish good wages and benefits, including health insurance and retirement benefits. These are vibrant small businesses, the very kind the State should be supporting as the basis for a strong skill-based economy. Without any reasonable ability to pass on the tax, the Governor's proposed tax and elimination of the exemption could potentially cripple innovation in health delivery and cost-containment, but also puts at risk the employment of hard-working citizens.

JAMES HARRIS, REGIONAL DIRECTOR OF REIMBURSEMENT FOR TRINITY HEALTH-NEW ENGLAND

Mr. Harris opposes SB 787 stating that in its current form would make changes to the existing hospital tax by changing the base year upon which the tax is imposed, therefore, resulting in a tax increase. This increase is estimated to cost our Trinity Health an additional $10.4 million while eliminating their ability to use tax credits in the future which will result in a further $1 million loss. Mr. Harris believes that what is needed is a further dialog between the hospitals, the legislature and executive branch to find innovative solutions that meet the needs of all parties.

JIM HORAN, CEO OF THE CONNECTICUT ASSOCIATION FOR HUMAN SERVICES

Mr. Horan opposes SB 787 stating that it includes insufficient new revenue, and that what new revenue there is comes from eliminating and reducing tax credits for middle- and low-income people. Instead, the Association encourages the Committee to seriously consider other ways to substantially increase revenue. While the state's economy is fragile, there are balanced ways our wealthy state can do this that will not deter economic growth.

CARROLL HUGHES-THE CT PACKAGE STORES ASSOCIATION

Mr. Hughes testified in opposition to section 21 of SB 787 which would eliminate minimum bottle pricing for alcohol beverages. He explains that many alcohol beverage provisions were developed by the legislature after the repeal of prohibition in 1933. The changes were specifically required to assure regulation of all sales of alcohol beverages in return for strict regulation of who a retailer could sell to or who they could buy product from, an implied contract was developed between retailers and the state. This was an abnormal business practice, but the state thought it met its needs, and the retailers accepted the conditions, which still exist today. Section 21 changes that 83 year-old implied contract and would cause major losses to the state's 1150 package stores and the customers they sell to.

CHARLES JOHNSON-CHIEF FINANCIAL OFFICER-HARTFORD HEALTHCARE

Mr. Johnson testified in opposition to the revenue proposals in SB 787. His testimony notes that this proposal would make changes to the existing hospital provider tax by changing the base year upon which hospitals are taxed, resulting in a tax increase. For Hartford Healthcare the rebasing results in an additional $15 million annually adding to the $110 million that we currently pay annually.

MATTHEW KNICKERBOCKER, FIRST SELECTMAN, TOWN OF BETHEL

First Selectman Knickerbocker opposes SB 787 for the following reasons:

1.) The move to delay the adoption of local budgets to "give towns time" to adjust to new expenses and revenue reductions imposed by the state does nothing to alleviate the problem. Rather, it compounds it exponentially. No matter when the state makes the final revenue figures known, it will be impossible for the vast majority of towns to absorb the impact of drastic reductions without debilitating cuts to programs, sharp increases in local property taxes or a combination of the two.

2.) Further, delaying budget referendums to mid-summer will add to the financial burden by forcing towns to either delay sending tax bills, or sending them using the previous year's lower mill rate, thereby reducing already constrained revenues by amounts that will range into the hundreds of thousands for some towns.

3.) Finally, the Teachers Retirement Board cost shift is now known to possibly be illegal, which almost guarantees a lengthy court battle in which the final outcome may not be known for many months. Lawmakers should immediately and without question send a signal to municipalities that this proposal will be abandoned. This one move would remove a significant amount of risk from the municipal budget process.

CHRISTOPHER G. KOPACKI, PH.D., STATE LIAISON-NATIONAL RIFLE ASSOCIATION

Mr. Kopacki opposes SB 787 and specifically the section that drastically increases pistol permit registration and renewals. According to Mr. Kopacki it has been determined that Connecticut's gun permit fees were already “higher than most other states” yet section 18 of the bill increases background check fees from $50 to $75, while section 19 increases the state portion of an initial permit to carry a handgun from $140 to $370 and permit renewals from $70 to $300.

CT BEER WHOLESALERS ASSOCIATION

The Connecticut Beer Wholesalers Association asks the Committee to reconsider Section 3 of Senate Bill 787 as they believe that the unintended impact should be taken into consideration. Ten small Connecticut distributors cover 100% of all of the costs involved in the recycling process and that an equitable partnership is necessary to offset these mandated costs. Connecticut's Bottle Redemption law operates as a transaction between distributors, retailers, and consumers.

CONNCECTICUT GI

CT GI submitted testimony specific to the 6% gross receipts provider tax imposed on Connecticut's ambulatory surgery centers (ASCs).Innovative and cost-effective treatment is what health care professionals strive to provide their patients. Unfortunately, the decision to impose a 6% gross receipts provider tax on ASCs makes that goal much harder to reach for the community-based Ambulatory Surgery Centers (ASCs) around the state.

DAN MCINTYRE, PRESIDENT AND EXECUTIVE DIRECTOR OF THE CHARLOTTE HUNGERFORD HOSPITAL

Mr. McIntyre opposes SB 787 as the proposed changes will further reduce the hospital's operating revenue which has already been cut due to annual reductions since 2012. Regrettably, despite the hospital's best efforts to adjust and manage, the dramatic effect of these combined changes has resulted in consecutive operating losses. The proposal as drafted establishes yet another tax on hospitals. It involves a taxing paradigm to eliminate hospital's real property tax exemption, and lets municipalities tax them. These proposals along with the other components of the Governor's policy package that impacts the state's hospitals are harmful and unwise. CHH is the largest employer in the greater Torrington area and a cornerstone in the community and will be negatively impacted if this proposal passes.

MAG MORELLI, PRESIDENT OF LEADING AGE CONNECTICUT

Ms. Morelli testified in opposition to sections 18 and 44 of SB 787.

SECTION 18: This section of the bill is proposing a $25 increase in the fee for a fingerprint search conducted by the Department of Emergency Services and Public Protection. This additional cost will be a financial burden to the already stressed long term care and service providers who are mandated to order such searches pursuant to Connecticut general statutes, section 19a-491c.

SECTION 44: THE NURSING HOME PROVIDER TAX

Connecticut nursing homes are currently required to pay a nursing home bed tax, or user fee, set at a rate of $21.02 per bed per day. The proceeds of this tax go toward funding of the entire Medicaid system of long term services and supports. While this tax continues to be a financial burden for many nursing homes, Leading Age's review of this section indicates no change to the current statutory policy or procedures related to the nursing home provider tax and therefore they do not raise objection at this time.

BRICE O'BRIEN-EXECUTIVE VICE PRESIDENT OF PUBLIC AFFAIRS- REYNOLDS AMERICAN INC.

Reynolds American Inc. (RAI) and its operating companies are opposed to S.B. 787, which would increase the excise taxes on cigarettes and moist snuff tobacco (MST) products as well as implement a floor tax. Mr. O'Brien urges lawmakers to reject this legislation that will result in lost jobs/create undue burden for the lower income workers and exacerbate cross-border smuggling.

DEREK THOMAS- CT VOICES FOR CHILDREN

Voices applauds the Governor for addressing significant structural imbalances in the state budget, and for a balanced approach that includes both line item cuts and revenue increases. The proposal, however, violates the principle of equity by generating revenue by raising taxes on those who can least afford it, while at the same time cutting the estate tax which is paid only by the state's wealthiest residents.

LORI J. PELLETIER, PRESIDENT CONNECTICUT AFL-CIO

Ms. Pelletier testified in opposition to SB 787 stating that it is her belief that instead of cutting vital public services, the state should enact a fee on low-wage employers that abuse our social safety net and essentially steal from taxpayers, or reduce costly outsourcing schemes that cost taxpayers millions more than they should. She also feels that we should review and repeal tax expenditures that no longer make sense and cost the state over $7 billion.

WAYNE PESCE, PRESIDENT, CONNECTICUT FOOD ASSOCIATION

Mr. Pesce is opposed to SB 787 on behalf of Connecticut's grocery retailers. His testimony opposes two specific sections in the bill: the first establishes a $0.10 redemption fee on carbonated beverages and the second proposes an increase in the cigarette tax.

EDIE REICHARD, DIRECTOR OF SLEEPING GIANT DAY CARE, INC. AND CO-CHAIR OF THE STATE FUNDED CENTERS DIRECTOR'S FORUM

Mr. Reichard testified in opposition to SB 787 noting that the proposed budget would reduce the children's budget to 29 percent of the general fund spending in FY 2018 and 28.6 percent in FY 2019. In addition, it would reduce funding for early care and education by 12.3 percent, k-12 by 0.44 percent, higher education by 7.3 percent and increase health and human services by 7.7 percent. Of particular concern for Mr. Reichard is the drastic $33 million dollar reduction in care4kids which provides short term subsidy for working families to afford quality child care.

ANDREA RYNN DIRECTOR, PUBLIC AND GOVERNMENT RELATIONS OF DANBURY HOSPITAL, NEW MILFORD HOSPITAL AND NORWALK HOSPITAL OF THE WESTERN CONNECTICUT HEALTH NETWORK

Ms. Rynn submitted testimony opposed to SB 787 as it establishes yet another tax on patient care. Her concerns are the following:

• It is built on the premise of receiving federal matching funds that Washington just announced will likely soon-disappear

• It is based on todays' math and does not account for predicted 16 % year-over-year increases in the pension liability now being pushed to municipalities

• It promotes potential discord between hospitals and their communities - relationships we have worked very hard to build and maintain in order to serve the collective needs of our residents

• It comes with promises from the administration with a track record of not living up to its promises.

BRIAN J. SHAPIRO, PRESIDENT: CONNECTICUT PREMIUM CIGAR RETAILERS ASSOCIATION

Mr. Shapiro opposes SB 787 which proposes to increase the current Cigar Tax Cap from $.50 cents per cigar to $1.50 per cigar. It is the Association's belief that if passed small family businesses and furthermore premium cigars have little chance to survive. Mr. Shaprio believes that if passed the tax cap will benefit only those companies in states like Pennsylvania, Florida and New Hampshire where most of the internet companies are based and where all three of those states have $0 OTP taxes.

MATTHEW F. TYSZKA, JR., ESQ.-DIRECTOR OF LEGISLATIVE AFFAIRS- CONNECTICUT CARRY, INC.

Mr. Tyszka testified in opposition to the pistol permit fee increase portion of SB 787.

MIDDLESEX HOSPITAL

Hospital leaders at Middlesex submitted testimony that states that SB 787 as drafted makes modifications to the existing hospital tax and, specifically, increases the base year upon which hospitals are taxed, thereby increasing the hospital tax. SB 787 also eliminates hospitals' ability to use the tax credits they already purchased and to purchase and use tax credits in the future. Middlesex Hospital goes on to explain that they are the cornerstone of their community as they provide good jobs and are a literal lifeline to the people they serve. Hospital leaders believe they need healthcare policies that are sustainable and improve the quality and access to care, not more taxes that are just bad policy.

AIMEE J. VARGAS, ESQ. DIRECTOR, STATE AFFAIRS, ANHEUSER-BUSCH (NORTHEAST)

Ms. Vargas testified in opposition to SB 787 and specifically the proposal to double the state's bottle deposit. He questions whether the proposed increase in the bottle deposit would, in fact, result in further promoting recycling in the state while also noting that Connecticut currently has higher beer taxes than neighboring states, including Massachusetts, New York and Rhode Island.

SCOTT WILSON, PRESIDENT OF THE CONNECTICUT CITIZENS DEFENSE LEAGUE

Mr. Wilson testified in opposition to SB 787 and specifically the pistol permit fee increase noting that this proposal is specifically targeting gun owners and future applicants for handgun permits.

ST. VINCENT'S MEDICAL CENTER

St. Vincent's testified in opposition to SB 787 stating that as drafted the proposal makes modifications to the existing hospital tax and, specifically, increases the base year upon which hospitals are taxed, thereby increasing the hospital tax. SB 787 also eliminates hospitals' ability to use the tax credits they already purchased and to purchase and use tax credits in the future.

YALE NEW HAVEN HEALTH

Yale Health states that the proposal includes an increase in the hospital net revenue tax. It is important to understand that the state tax on the hospital industry is on revenue- not profits. No other industry in the State is taxed in this way. If this proposal is adopted, hospital taxes will increase. For Yale New Haven Health, the state tax burden will rise to nearly $230 million which makes Yale Health the single largest taxpayer in the State. In a time when we are working diligently to reduce health care costs to make it more affordable for our residents, Connecticut tax policy continues to increase the cost of care.

THE FOLLOWING CONNECTICUT RESIDENTS ARE ALSO IN OPPOSITION TO SB 787:

Riccardo Abate

Carole Abbate

Christopher Abbott

Rahim Abdul Wright

Bill Abo

John Abrahamian

Lary Ahearn

Patrick Alden

Paul Alfano

Hannes Alholm

Theodore M. Antonitis

Lou Arata

Carmelo Aresco

Peter Arseneault Sr.

Bryan Avigne

Melissa Bader

Michael Badorek

Lee Bailey

Robert Bailey

Matthew Baldoni

Steve Beatson

Bob Beaumont

Willard Bechter

Kristian Bellemare

Victor Benson

Don Berg

Daniel Bergin

Ray Bevis

Gary Birkmaier

Ron Bish

Alan Blaschik

Walter Ray Bodine, Jr

Robert M. Bohn

Dustin Bondi

Jeffrey Booth

Rich Bouffard

Dick Bowden

Steven Bowen

Diane Bradanini

Donald & Karen Bradway

Lou Ann Brannan

John Brennan

Gloria Breton

Robert Briggaman

John Brodin

Bennett Brooks

Peter Brown

Gerald Brunetto

George R Buck

John Buckley

Sandy Bugai

Daniel Bulkley

Jayne Burchard

John C. Burchard

Francis E. Burgess

Mike Burke

Jean Burns

Bobby Byrnes

Bill Campbell

Mike Campbell

Louis Camputaro

Jeff Caporaso

Thomas Cardinale

Valerie Cardinale

Russell Carello

Kimberli Carpenter

Laura Carter

Tom Carter

Michael Cataldo

Joe Catale

Dan Cefaratti

Peter Ceulemans

Michael E. Chadwick

Daniel T. Chaney

Jon Chapitis

Brian P Chase

Paul Chase

Robert Chernak

Brooke Cheney

Jason Cherico

Danine M. Chevarella

Tom Chuckas

John Chunis

Margo Clark

Dale M. Clayton

J Clayton

Christopher J. Coniam

Mark Conrad

Salvatore A. Consiglio Jr.

Andrew J. Covell

Guy Cranfill

Andrew Criscuolo

Beth Croasdale

Stephen E. Crowley

Joe Cuccia

Jon Cuprak

William D Curlew

Nancy Curlin

Mike Cusanelli

Tyler Cusson

Linda Czaplinski

Arthur Daigle

Kevin J Dalton

Sarah Dann

Neil Dantino

Tabatha Darcy

Tom Darna

Richard Daugherty

Dale Dauphinais

Robert Day

Pasquale De Filio

Joseph & Jacqueline De Luca

Reported by: Jason Snukis

Date: 5/12/2017