Blog: Government Administration

Government Administration, Legislation

Stay Engaged With the 2014 Legislative Session Through CPI

  • Feb 04, 2014
  • by Ben Zimmer
Stay Engaged With the 2014 Legislative Session Through CPI

The 2014 Connecticut legislative session begins tomorrow.  The Connecticut Policy Institute will be providing several ways for you to stay on top of what’s going down in Hartford without having to invest too much of your own time.

Weekly Bill / Hearing Tracker & Analysis

Every day, the CPI will be tracking the proposed bills, scheduled hearings, and other legislative activity with the most direct impact on ordinary Connecticut residents and businesses.  We will post weekly summaries and accompanying analysis on our blog, and also include them in our weekly newsletter.  For more frequent updates than once a week, follow us on Facebookor Twitter.   

2014 Legislative Awards

For the second straight year, the 2014 legislative session will feature the CPI's, "Connecticut's Choice Legislative Awards" -- a lighthearted and interactive way for Connecticut residents to engage with the legislative session and hold political leaders accountable.  Anyone can submit a nomination for an award through this form, and the winners are determined entirely by popular voting on our website. 

Below are the four awards, with the 2013 winners listed.  Last session we received more than 25 nominations and 500 votes across all four awards.  This year we’re hoping to get even more participation, so if you see a policy proposal that makes you cringe or laugh be sure to submit a nomination and encourage your friends to vote. 

Worst Policy Idea

2013 winners:  First place: Gov. Malloy's ongoing "First Five" and "Next Five" programs paying companies to move to or stay in Connecticut.  Second place: An Act Requiring Use of Gender-Neutral "People at Work" Signs by the Department of Transportation.

Golden Fleece Award

2013 winner: $120M of State Spending on Hartford-New Britain Busway (plus $10M annually in operating costs)

Biggest Time Waster Award

2013 winner: Legislative Hearing Debating Who Decides How Long Hookah Lounges Can Be Open

Absurd Quote Award:

2013 winner: Gov. Malloy's claim that Connecticut is "leading the way" on job creation

New Policy Research & Recommendation

Stay tuned for new CPI policy papers in the coming months featuring research, analysis, and recommendations on:

  • Urban policy
  • Unfunded state mandates on municipalities
  • Public pension liabilities and CT's long-term fiscal outlook
  • Education Policy

About the Author: Ben Zimmer is the CPI's Executive Director

Taxes & Government Spending, Healthcare, Government Administration

CT Government Weekly Rundown -- November 4

  • Nov 04, 2013
CT Government Weekly Rundown -- November 4

CT Begins Collecting Taxes on Amazon.com Sales
On Friday Connecticut joined a growing list of states that tax Amazon.com sales within the state. 

The new tax is the culmination of several years of negotiation between the Connecticut government and Amazon.  In 2011, the Connecticut General Assembly passed a law requiring online retailers to collect state sales tax for purchases made within Connecticut.  Amazon refused to comply, citing federal laws that exempt online retailers from state and local sales taxes unless they have in-state brick-and-mortar operations.  The state and Amazon resolved this dispute in February -- the company agreed to begin collecting the sales tax and to build a $50 million distribution center in Connecticut, plans for which are underway in Windsor. In exchange, the state agreed to not pursue back taxes on past sales.  

The Department of Revenue Services estimates the new tax will generate $8M in revenue this year and $13-$15M in annual revenue going forward.  

What It Means For You: Connecticut consumers will see a larger bill when shopping online through Amazon.  But traditional Connecticut retailers will benefit from the change – they understandably felt online retailors' exemption from state sales tax gave online retailors an unfair competitive advantage.  As far as the state’s broader fiscal challenges go, $13-$15M in additional annual revenue won’t make a substantial impact.  

Audit Identifies Mismanagement in Dep't of Public Health

The state auditor released a report this week criticizing the Department of Public Health for widespread mismanagement, including mishandling of medical inventory and a failure to properly monitor service providers the department licenses.  The audit covered fiscal years 2010 and 2011 and included 33 recommendations for corrective action.  The Department issued a statement that it agreed with the recommendations and has already begun addressing them.

What it Means For You: This is the third audit report in the last few months identifying mismanagement at a CT government agency or department.

 

Jobs & the Economy, Taxes & Government Spending, Government Administration

CT Government Weekly Rundown -- August 26

  • Aug 26, 2013
  • by Alexandra Forrester
CT Government Weekly Rundown -- August 26

Back To Reality After “Tax Free Week”

We hope you had a chance to take advantage of “tax free week,” which ran from August 18-24.  During the week, all clothing and footwear under $300 sold in CT was exempt from the sales tax—except for clothing used solely for a sports activity.  Governor Malloy estimated in an interview that the week saved taxpayers $8-9 million.  That’s about 0.2% of the state’s annual sales tax revenue.  Meanwhile, two years ago Connecticut’s government increased taxpayers’ annual sales tax bill by 5.8%, raising year-round rates on everything from 6% to 6.35%.  Critics have noted that it’s a bit hypocritical for politicians to celebrate a $9 million discount off a bill they increased by $260 million.  But that hasn’t stopped them from doing so.  In politicians’ defense, promoting “discounts” off marked up prices is a tried and true marketing technique for business and government alike.

What It Means For You: The return of normal CT tax policy today is a reminder that Connecticut’s overall middle class tax burden (taking into account all state and local taxes) is the ninth highest in the country and the second highest in the northeast.  If you weren’t able to get done a year’s worth of clothes shopping last week, you can always follow this family’s strategy of driving to New Hampshire for shopping.  Up there, every week is tax-free week, and not just on clothing.  Of course, with gas prices being what they are, that strategy entails its own costs.

Early Intervention Drags Out CT Foreclosures

A national housing report released last week found that foreclosure activity in Connecticut is continuing to increase even as many states have started to see foreclosure activity decline. While the nation as a whole has seen a 32% drop in foreclosure activity this year, CT has seen year-over-year increases for six months in a row. After a 33% increase in foreclosures from June to July, Connecticut now has the 4th highest foreclosure rate in the country—the highest ranking for the state since 2007.

Why is Connecticut's foreclosure activity so high? Connecticut is one of many states with judicial foreclosure procedures, which make it more time-intensive for banks to foreclose on houses.   In 2008 Connecticut passed legislation that further slowed the process by increasing regulations on foreclosures and providing aid to homeowners who couldn’t pay their mortgages. These procedures were able to decrease foreclosures at the time of the recession, but the intervention served to delay foreclosures rather than reduce the total number.  States with judicial foreclosure are now experiencing higher foreclosure and payment delinquency rates than the non-judicial states that left the process alone during the crash. 

What it Means for You: Even if you are not currently dealing with foreclosure proceedings personally, foreclosed houses still have significant effects on surrounding communities. Economic studies have found that foreclosures typically result in a 1% decrease in property values for nearby homes, and can cost a neighborhood about 70,000 dollars in aggregate value loss. Lower housing values can impact other areas of the economy, driving reductions in consumer spending and new construction projects.

Census Report Shows CT Has Nation's Most Generous Public Pension Benefits

A new report from the U.S. Census has found that Connecticut’s government retirees have the highest average annual pensions of any state in the country.  This finding aligns with analysis in the CPI's Sept. 2012 policy paper on CT public pensions, which notes that, unlike in many states, Connecticut’s public pensions lead to lifetime compensation for public workers that exceeds compensation for equivalent private sector workers.  The CPI paper also notes that these benefit levels are not sustainable as Connecticut’s pension and retiree healthcare system is underfunded by about $60 billion.  The paper outlines specific recommendations for reforming the system.

What It Means For You: Public pensions and other obligations due far in the future rarely generate the urgency of more immediate problems, but if Connecticut does not address its debt problems, the consequences for the state’s residents will be very real and very painful, including future tax burdens damaging to the economy, cutbacks in essential services, default on state obligations, or a combination of all three.  We have already seen some of that in the current budget, which delayed repayment on bonds and extended tax increases that were scheduled to expire, while spending billions on debt service and state contributions to the pension fund.   

 

About the Author: Alex Forrester is a policy analyst for the CPI

Jobs & the Economy, Taxes & Government Spending, Government Administration

State to Review Tax Incentives Policy

  • Jan 13, 2012
State to Review Tax Incentives Policy

On Thursday, Governor Malloy signed an executive order creating a nine-person panel to review the effectiveness of tax credits in creating jobs. Interestingly, Governor Malloy's own $900 million jobs bill passed last year was focused largely on these very sort of tax incentives.

The taskforce, called the Governor's Business Tax Policy Review Taskforce, comes at the urging of state Comptroller Kevin Lembo.  Several Connecticut politicians have been calling for such a review for some time.

In the CPI's recent policy paper on Connecticut Job creation, the Institute lays out a three-part test for assessing whether job-creation tax incentives are good policy.  The CPI is skeptical of most targeted job creation tax incentives, instead prefering a holistic set of state policies conducive to economic activity and organic job growth.   

Reports differ on how Connecticut's total business tax burden compares to other states.  The Council on State Taxation ranks Connecticut has having among the lowest total effective tax rates for businesses.  But the Tax Foundation ranks Connecticut as having among the worst state business tax climates.  The differences can be accounted for in different metrics used to measure tax burdens.

What are your opinions on Connecticut's current business tax policy? Is heavy reform in order?  And if so, what should reform entail?