The Democratic dominated state Senate, over Republican opposition, on Wednesday approved legislation containing eight separate pieces in an omnibus bill ranging from a lowering of commercial vehicle taxes in some of Connecticut’s higher-taxed communities, to prohibiting state employees from subcontracting school construction projects, and expeditingthe review process for the development of historic buildings.
The three-hour-long Senate session was highlighted by GOP criticism of a provision that would allow for a Connecticut-based water company to purchase Aquarion, as well as a protracted argument over whether an effort to lower taxes on commercial vehicles would include a long-term, five-percent hike on residential vehicle taxes. The GOP lawmakers offered three amendments that were all rejected along party lines.
The 20-to-9 final vote with seven senators missing occurred at 3:15 p.m. in the first day of the two-day gathering of the General Assembly, which continues with the House of Representatives on Thursday.
Republicans warned that the proposed change in state law to allow the New Haven-based South Central Connecticut Regional Water Authority to bid for Aquarion, a division of the Massachusetts-based Eversource, could backfire in higher rates for Aquarion’s current 59-town service area. They sharply criticized the possible deal’s inclusion in the special legislative session, whose agenda items were brought up under so-called emergency provisions of the General Assembly.
Democrats said any potential deal creating a new Aquarion Water Authority would first have to be approved by the state Public Utilities Regulatory Authority.
Senate Minority Leader Stephen Harding, R-Brookfield, stressed that because the water company provision was never discussed in the recent regular session of the General Assembly, the issue should not have been part of Wednesday’s agenda. “This is something that’s going to impact the water rates and the water supply to 700,000 people in the state of Connecticut and we’re saying to them that we don’t even want a public hearing on this,” Harding said. “What does that say to our constituency?”
At about 12:15, Harding started off the session with a scolding of the chamber, calling the overall bill “an aircraft carrier” with so many different pieces. He proposed “dividing the question” and voting separately on the water company part.
The proposal was rejected along party lines 19-to-9 with 8 absent in the chamber, which is dominated by Democrats 24-12.
By 12:40, Sen. John Fonfara, D-Hartford, co-chairman of the tax-writing legislative Finance Committee started the main debate, explaining a portion of the law that is needed, because without action,”significant difficulties” would occur starting Oct. 1 for commercial vehicle owners in 46 towns and cities with tax rates above 32.46 mills, including as many as 11 towns, especially Waterbury, Hartford and Hamden, that would be taxed at higher levels. Vehicle depreciation rates would also be changed.
“Without action today this change would result in significant difficulty for both town assessors and commercial vehicle owners,” Fonfara said. “Commercial motor vehicle owners would be assessed as personal property.”
“There were underlying mistakes in the bill,” said Sen. Norm Needleman, D-Essex, noting lingering problems date back to 2022 legislation. Needleman, who is also the first selectman of his hometown, said a fixed assessment level is important, including the 20-year phase-in eventually reducing car values to $500.
Another portion of the bill would allow local tax officials around the state to study and potentially enact the lowering and even phasing-out of personal property taxes on vehicles, effective in July of 2025.
“If you live in a city and you look at your car and you go to a suburb right next to it, the difference in taxation is very apparent,” said Senate Majority Leader Bob Duff, D-Norwalk. “It’s one that really makes your eyes pop out. There’s an unfairness there. If we’re telling people we’re trying to invest in our cities and our municipalities and our urban areas, but yet it costs more to live there, that is really against the policies we’re trying to put forward in this state.”
The financial portion of the 137-page bill, at the request of Gov. Ned Lamont, aims to make Connecticut more attractive for bank-to-bank lenders by changing the definition of uninsured banks in the state to “innovation banks.” It would also make changes in interest rates on late tax filings of underpayments for insurance companies, dating back to the federal pandemic relief for employee retention.
State Sen. Rob Sampson, R-Wolcott, whose district includes part of Waterbury, called the change to commercial vehicle taxes appropriate and needed, but the proposed depreciation rate concerns him. “Why are we going to increase the value of everyone’s car by 5 percent over the next 20 years?” Sampson said. “I have promised by constituents I would not vote to raise taxes.”
Fonfara said towns would receive less revenue. “If towns are receiving less revenue, car owners are paying less in taxes,” Fonfara said.
Sampson said he was worried about average private vehicle owners paying more over time and he introduced an amendment aimed at making car taxes lower. Fonfara opposed the amendment, which was defeated along party lines.
“Characterizing this as a tax increase is just incorrect,” Needleman said during the debate on the amendment. “With a little bit of luck we will never hear about this again.”
Sen. Ryan Fazio, R-Greenwich said that raising the depreciation level for new cars from the current 80 percent to 85, as detailed in the bill, clearly raises taxes for owners. “The affordability of Connecticut is a stressor on Connecticut families,” said Sen. Kevin Kelly, R-Stratford. “The Connecticut family is struggling each day, living paycheck to paycheck.”
“What we’re simply doing doing today is changing the tax rate from 80 percent to 85 percent,” Harding said. “Eighty five is more than 80, period. You can try to do fuzzy math all you want.”
“Assessments don’t determine taxes,” said Senate President Pro Tempore Martin Looney, D-New Haven, “mill rates determine taxes.” He said that there was a “spike” in used car values at the height of the pandemic because of supply chain problems. “Whether it’s 80 or 85, the decision is still in the hands of the municipality to decide what its rate will bill. In addition to that, we are reminding municipalities in this bill, where the authority in some cases may not be clear, that they do in fact have the option of creating a differential car tax, as long as the car tax is lower than the tax on real and commercial property.”
Original article found at CT Insider.
