HARTFORD, CT — Gov. Ned Lamont didn’t even mention the 1.5 cent per ounce tax on sugary beverages, but there was little doubt Wednesday about who didn’t support his proposal.
The 13 members of the Republican Party’s conservative caucus each had “Double Gulps” from 7-Eleven on their desks. A “Double Gulp” is a larger than a “Big Gulp.”
There are seven cities across the country that have a tax on sugary beverages. If Connecticut approved the tax it would be the first to implement this change on a state level. The Lamont administration argues that it would improve health disparities and outcomes and reduce healthcare costs.
Rep. Mike France, R-Ledyard, said the “Double Gulp” was a signal of their opposition.
“We just heard about a number of revenue increases,” France said. “Either you expand the base or you increase the rate.”
He said they oppose a tax on sugary beverages and the expansion of the sales tax base.
France said it would have been more honest of Lamont to propose an increase in the sales tax instead of getting rid of exemptions or taxing items that have never been taxed in the past.
He said Connecticut never used to tax services like legal services and accounting services. He said that’s going to add a cost to consumers and businesses that have never had to collect sales tax in the past will now have to collect it.
“I am not proposing an increase in the sales tax rate because I believe we have to reform our sales tax for the 21st century,” Lamont said. “Our current sales tax is designed for a Sears Roebuck economy driven by over-the-counter sales. Today we live in an Amazon economy which is driven by e-commerce, digital downloads, and consumer services.”
France said he doesn’t disagree that online services should be taxed. However, the services Lamont wants to tax have been around for more than 50 years.
“That’s a gimmick that has nothing to do with e-commerce,” France said.
He said a sales tax is on sales, “a service is not a sale.”
But Lamont wondered if it’s fair to have a tax on manicures, but not haircuts?
“Expansion of the base helps to make the sales tax more robust, fairer, and raises the revenue we need to get our budget into balance,” Lamont said. “I have been forewarned, every tax expenditure has a strong lobby behind it and the pushback will be ferocious.”
Lamont posited that if a lawmaker doesn’t like it then they have to come up with another way to raise the revenue.
“We welcome you to this debate,” Lamont said. “If you disagree, have at it, but again the numbers must add up at the end of the day.”
House Speaker Joe Aresimowicz, D-Berlin, said the current tax system is “flawed.”
He said there are a lot of things that make Connecticut’s tax system “inherently unfair.”
“If you don’t like the sales tax exemptions then give us your ideas,” House Majority Leader Matt Ritter, D-Hartford, said.
Lamont did not propose a sales tax on groceries, which is the largest of the sales tax exemptions currently on the books.
Connecticut forgoes about $444.5 million a year in sales taxes on “food products for human consumption.”