Member Testimony/Position Statements
In this Section
MetroHartford Alliance In Opposition to Senate Bill 462: An Act Concerning a Fair Share Health Care Surcharge
Hartford Property Tax Revaluation
Testimony of the MetroHartford Alliance In Opposition to Senate Bill 462: An Act Concerning a Fair Share Health Care Surcharge
Thursday, March 9, 2006
Labor & Public Employees Committee
Good Afternoon Senator Prague, Representative Ryan and members of the committee. I am Oz Griebel, President and CEO of the MetroHartford Alliance. Our organization consists of over 2,300 members, bringing together business, nonprofit organizations and civic leaders to invest in the Hartford region’s future economic growth. On behalf of our members, I am here today to voice strong opposition to Senate Bill 462, An Act Concerning a Fair Share Health Care Surcharge.
This legislation runs contrary to the goals of job creation and economic development that our organization is working towards and that this legislature has enthusiastically endorsed this session. It can’t be repeated often enough – Connecticut is last in job growth nationwide. It is time we begin to address the reasons why we are last, and recognize that this legislation is certainly not a step in the right direction.
Last August, the Alliance orchestrated a site selector tour, where we hosted 12 global site location consultants and corporate real estate executives to explore our region and all that it has to offer – from accessibility to adaptability. Yet, even with all that our capitol city and this region have to offer, Connecticut’s anti-business climate represses growth. As part of their evaluation, site selectors nationwide assess the business climate when considering where to relocate or expand, and in doing so they evaluate the legislation that is offered by this General Assembly. By raising legislation that would impose another tax on business, you are sending the wrong message to our existing businesses, and you are also lessening our ability to be competitive across the country.
The real issue that we need to address is affordability in health care, which is an issue your colleagues in the Insurance Committee are working on as we speak, and it is one that we include in our legislative agenda. The Insurance Committee is researching thoughtful solutions to this problem, while the Appropriations Committee is also evaluating the recent cuts to SAGA (state administered general assistance) and the uncompensated care pool that ultimately impact the private consumer of healthcare by increasing the overall cost. Both committees should be applauded for their efforts to address the affordability issue.
Similarly, leadership in the House and Senate has also stepped up to this challenge. In December, our organization was asked to participate in an Insurance and Financial Services Forum, which was called by Speaker Amann and Senate President Don Williams. It raised several questions including how to deal with job loss in our state and how to address the issue of healthcare affordability. Since that time, we, along with Bob Flynn of the IFS Cluster, have had follow up meetings with both leaders to discuss these issues further. Our most recent suggestion to both was to hold a Healthcare Summit, similar to the Transportation Summit that was held in 2000, and to create a similar analysis that the Transportation Strategy Board created—the results of which are currently being pursued with great support by this Legislature. The issue of healthcare is just as complicated as our transportation crisis, if not more so. We feel it deserves the same level of attention, by bringing together all affected parties to discuss real solutions.
Senate Bill 462, however, is not a potential solution to the problem of affordability. It is a penalty on employers – the same employers who we want to relocate and expand in Connecticut. We respectfully ask that you oppose Senate Bill 462.
Hartford Property Tax Revaluation
April 25, 2006
The Honorable Donald Williams The Honorable James Amann
Senate President Pro Tempore Speaker of the House
Legislative Office Building Legislative Office Building
Room 3300 Room 4105
Hartford, CT 06106-1591 Hartford, CT 06106-1591
RE: Hartford Property Tax Revaluation
Dear Senator Williams and Speaker Amann:
The Hartford Chamber of Commerce, a subsidiary of the MetroHartford Alliance, represents all the major employers in Hartford and is a proud partner in the revitalization of our capitol city. We applaud the efforts of the Mayor, the Governor and the State Legislature to commit resources to building such economically significant projects as the Connecticut Convention Center, the Science Center, our residential housing stock and the Riverfront and Adriaen’s Landing. Hartford is truly in the middle of a remarkable renaissance, and people nationwide are beginning to take notice.
Encouraging Private Sector Investment and Job Creation
It is at this point in our renaissance that we need to pay special attention to nourishing and encouraging continued investment by the private sector to further complement the efforts that our state has made. Last November, we were pleased to learn that part of Mayor Perez’s tax reform strategy was to eliminate the cap/surcharge tax system that sets Hartford apart from other major cities and all other Connecticut towns. This surcharge system is a hurdle for all of us to overcome in our collective efforts to attract new businesses to Hartford, retain the outstanding commercial partners who currently reside within its borders, and attract additional commercial investment.
In particular, it is important that we attract additional commercial investment to complement the recent notable growth in investment in residential properties. However, it is difficult to convince a company or an investor to participate in Hartford’s renaissance when the reality is that they will be taxed at a rate 15% higher than the existing mill rate on top of their regular tax bill. The surcharge has been a strong deterrent to job creation and investment in Hartford.
Ongoing Negotiations
Since last November, we have been meeting with Mayor Perez and his team to discuss property tax reform options. When the Mayor proposed the 4% circuit breaker plan, we considered it carefully for several weeks and tried to work out a possible compromise by applying a cap, similar to all other states that currently have a circuit breaker program. Unfortunately, this was unacceptable. We are now at a crucial tipping point, and it continues to be our goal to work with government to help move Hartford in the right direction. We recently submitted another proposal that is described in greater detail below.
Opposition to Delaying Revaluation
We understand that a delay of revaluation until 2010 is being discussed as another option. We feel strongly that this is not the right path to choose for residential homeowners, commercial property owners or the overall future development of Hartford. Property assessments are already frozen at 1999 levels, and the distortion of true property tax levels will only be exacerbated by repeated delays and will become more difficult to swallow as the years pass. Additionally, with anticipated business mill rate increases over the next five years, the current business mill rate of nearly $70 is expected to rise to over $100. This alone would serve as a substantial deterrent to business growth. We cannot let Hartford become the next Waterbury with its considerable business deterioration resulting from repeated delays in revaluation.
Our Compromise Proposal
If full revaluation with the existing cap/surcharge program were to go into effect with the city’s current budget, the residential property tax burden would increase from $34.7 million to approximately $54.6 million, with the commercial portion dropping from $86.2 million to $75.6 million. To assist in the minimization of the residential tax increase and in order to keep Hartford moving, we developed a compromise proposal based in theory on the concept that was passed by the Finance, Revenue and Bonding Committee as well as early discussions with several members of the Hartford delegation. For several weeks, we met with members of the Hartford delegation to negotiate the terms of the final agreement, and we feel it meets the needs of all parties.
Our business members are committed to paying their fair share of the property tax burden. Under our compromise proposal, the 2004 tax levels will be frozen, similar to the Finance proposal. However, the compromise proposal phases out the surcharge portion of the existing cap/surcharge program over six years. This continues a portion of the financial impact of the surcharge program throughout the phase-in period. To lessen the impact to residential taxpayers, the business community has agreed to take on an additional burden to help get the city through a five-year phase-in of revaluation without driving out homeowners.
Under our proposal, the business community will take on an average increase of $32,095,463 each year in addition to their regular tax bills in order to help relieve the burden of revaluation on residential properties. Our proposal and corresponding statutory language are prepared and available upon request. It is our goal and a primary component of this plan to keep the tax increase on residential properties under 5% each year, which is consistent with the bill that was approved earlier this month by the Finance, Revenue and Bonding Committee. This added cost to the business community is necessary in order to achieve this goal.
Clearly, action to address the property tax issue in Hartford is required. Delaying revaluation in Hartford is not the answer, but full revaluation would have too great an impact on residential homeowners. Hartford’s business community is willing to step up to the plate to turn Hartford’s fiscal problems around and push the city further through this period of renaissance. The time is now, not in 2010, to correct our tax system, help grow our housing portfolio and create new jobs. Our compromise plan is the result of months of work and careful consideration of this city’s needs. It offers a solution for all classes of property and moves the city in the right direction.
We look forward to continuing our discussions with you on this important issue. Please contact Katie Bailey directly at 728-2262 or kbailey@metrohartford.com with any questions regarding our proposal or requests for further information.
Sincerely,
cc: Representative Richard Belden
Senator Eric Coleman
Senator Eileen Daily
Senator Lou DeLuca
Representative Art Feltman
Senator John Fonfara
Secretary Bob Genuario
Representative Ken Green
Representative Minnie Gonzalez
Representative Marie Kirkley-Bey
Representative Carlo Leone
Representative Evelyn Mantilla
Representative Doug McCrory
Senator Bill Nickerson
Representative Cam Staples
Representative Bob Ward