The Finance, Revenue, and Bonding Committee saved its most controversial bills for its Tuesday deadline, but it did debate some that didn’t receive unanimous support Monday.
One of those bills was one that creates a regional hotel tax.
Under the bill, the state’s hotel tax would increase from 12 percent to 15 percent and 20 percent of the revenue from the tax will be distributed annually to municipalities and regional councils of government. It’s expected the three percent tax increase will result in $18.8 million per year for local government.
Rep. Vincent Candelora, R-North Branford, said he would rather see the Appropriations Committee cutting spending than seeing the Finance Committee raise taxes.
Sen. Andrew Roraback, R-Goshen, wondered how the tax would impact the tourism in the northwestern part of the state.
“There’s been one goose that has been laying any golden eggs in Litchfield County, and that is our tourism agency,’’ said Roraback. “This may end up putting a noose around the goose’s neck.”
Rep. Cameron Staples, co-chairman of the Finance Committee, said at 15 percent Connecticut is still competitive with surrounding states. He said New York’s hotel tax is considerably higher.
The other bill, which received a fair amount of debate Monday, was a bill that creates a 17-member Revenue Accountability Commission to review the effectiveness and efficiency of the states tax structure.
Republicans expressed opposition to the bill because they weren’t sure a politically appointed commission could keep the sensitive nature of the tax information disclosed on the states tax forms by individuals and businesses, secret.
“The opportunity for mischief is too great,” said Roraback.
The information could impact the competitive edge some Connecticut companies have, if this information is made public, Candelora said.
But Rep. Brendan Sharkey, D-Hamden, couldn’t help express his frustration.
He said for years the legislature has been hearing that the Department of Revenue Services can’t provide us with aggregate tax information.
He said the lack of information being brought forward to help inform lawmakers about the states tax structure has been a “travesty.”
The Office of Fiscal Analysis said if a committee member discloses confidential information they can be fined $1,000 or serve less than one year in jail, or both.
Taking Pressure Off the State Credit Card Received Bipartisan Support
In an effort to erase some of the pressure on the state’s credit card, the Finance, Revenue, and Bonding Committee eliminated $412.7 million in bond authorizations Monday.
Previously authorized projects for both municipalities and state agencies were reduced or eliminated altogether in the bill. The committee also took projects from New Haven, Hartford, and Bridgeport, and shaved 15 percent off of each of their collective bond authorizations. Altogether the bill lowers the state’s authorized bonding by 22 percent.
This should move the state well-below the 90 percent bonding cap, Sen. Donald DeFronzo, D-New Britain, said.
“Our goal was to take aggressive action to substantially reduce existing bonding authorizations,” DeFronzo, who chaired the subcommittee in charge of eliminating the borrowing, said. “To that end, we have not proposed any new authorizations, executive or legislative.”
Rep. Livvy Floren, R-Greenwich, said the bill was an “even-handed, across the board attempt,” at accomplishing the goal of reducing Connecticut’s bonded debt.
Sen. Eileen Daily, co-chairwoman of the Finance Committee, said the bill, if approved by the General Assembly, should improve the state’s evaluation by influential rating agencies.
The bill described as a “monumental task” passed with bipartisan support.
DeFronzo said it’s a bit “unusual” for a bill of this magnitude to pass on the consent calendar, but that’s exactly what happened Monday.
Click here to see list of bonding allocations the committee reduced or eliminated.