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Punishing the Good Guys because there are Bad People

“No Man’s Life, Liberty, or Property are Safe While the Legislature is in Session” – Gideon J. Tucker

On Tuesday, government employees enjoyed an extra, yet unplanned vacation day when multiple state agencies experienced a widespread internet outage due to a tripped electrical circuit breaker. The issue wasn’t resolved until 3pm the same day; as many as five hearings and committee meetings were canceled or delayed because of a COVID-era regulation that requires meetings to be hybrid. 

Solving Housing Shortage by Creating a Bigger Shortage 

Due to the internet outage, the Housing Committee delayed their public hearing on rent control until 3pm. Nearly 400 people signed up to testify about whether the government should force landlords to cap rent increases at four percent plus the consumer price index (CPI) — the average change in prices in a fixed market basket of goods and services for all urban consumers in the northeast region. Over the last 12 months, the CPI has fluctuated between 6.0 to 7.4 percent. 

Yet proponents of the bill didn’t think the government overreach was enough. They suggested the cap should be lowered to 2.5% or 3%, stating that this would track with pre-pandemic average rent increases. They also want the proposed cap established between current and future tenants of a unit. 

Central Connecticut State University (CCSU) Professor John O’Connor, who is also vice president of the union CSU-AAUP, felt three percent was a justifiable rate of return for property owners and that, “This is not an economic problem. This is a political problem.” 

Senator Rob Sampson (R-16th) pushed back stating he is “desperately trying to find a solution to the problem using legitimate public policy and not simply suggesting that whatever feels good is going to solve the problem.” He went on to ask if this is “what they are teaching at CCSU” and if “it’s okay to tell some other person how much they are supposed to realize from property that they own.” 

Robert Dale, owner of Dale Development, was one of many landlords opposing the bill. He explained the most consequential challenge builders currently face when doing business in Connecticut is attracting financing, debt and equity capital. “Unfortunately, the Connecticut story has been a tough sell, even to Connecticut-based banks,” he said, adding that he has had experience with financial institutions declining to provide capital based entirely on an unwillingness to do business in the state. 

Guihong Geremia a housing provider, wrote in her testimony that, “As a small business owner I strongly recommend that we should not have rent cap at all.”  She argued that the state has fair rent commissions that help tenants who face unreasonable rent increases, explaining to lawmakers that passing this bill will force her to defer repairs and maintenance due to having to first pay the mortgage, property tax and insurance. 

The most interesting testimony came from a tenant, Susan Zabohonski, who waited almost five hours to speak in person against the bill. She feared that by not allowing landlords to charge the rent necessary to keep up with rising costs and inflation that there will be fewer housing options for people. 

If the bill fails, lawmakers in support have a backup plan and introduced legislation that establishes a task force to study rent stabilization policies. This will ensure that some form of rent cap option could still be an option. 

Teacher Union Greed More Important Than Education 

The Finance, Revenue and Bonding Committee met on Wednesday (Feb. 22) to hear from constituents on a way for lower-income children to attend private schools. The bill provides tax credits for donations made to nonprofit organizations that provide educational access and opportunity scholarships.  

The legislation will help disadvantaged students who would otherwise not have access to certain schools due to their zip code, as well as cut down on the workload of overworked teachers who are dealing with classrooms. No money will be taken away from public schools to fund the program. 

CT American Federation for Teachers (AFT) Chief of Staff Stuart Savlkoul strongly urged the committee to reject this and any bill like it, requesting that any public dollars be used in public schools. He said, “Our schools need more funding” but failed to mention that Connecticut already spends $22,188 per student — the sixth highest in the country including Washington, D.C. Click here to see his testimony. 

This isn’t the first time Mr. Savelkoul has come on the wrong side of an education debate. In a December 2020, he retweeted a petition to strong-arm Gov. Ned Lamont to agree to a list of union demands otherwise they would insist schools shift to full-time remote learning. A recent report shows that extended remote learning harmed students. 

The committee also heard testimony on a proposed ammunition tax. The bill establishes an excise tax at a rate of two cents per round on .22 caliber or less and five cents on all other ammunition. The revenue will fund grants to be doled out by the Commission on Community Gun Violence Intervention and Prevention. 

An opponent of the bill, CT Citizens Defense League President Holly Sullivan, said the proposed tax is a direct penalty to individuals who are not responsible for the actions of others. She also noted that it disproportionally impacts low-income residents who already struggle to afford the ammunition they use to home in their safe handling and proficiency skills at a gun range. 

Labor Committee Creating More Problems 

Yankee Institute’s Labor Fellow, Frank Ricci had a busy week providing testimony to the Labor and Public Employees Committee on the following legislation.  

He testified against a bill that would force employers with five hundred or more employees — including franchisors with franchisees that have five hundred or more employees like Subway — to pay a quarterly fee to the states’ Labor Commissioner based on the number of workers that utilize state services such as the HUSKY health program. 

If passed, businesses will be compelled to increase prices or reduce costs by cutting employee hours or worse lay them off to offset the cost of this penalty. 

Thankfully, the bill’s chances of passing are slim. According to the CT Department of Labor, there is no way for them to be able to differentiate whether a franchisor has, collectively, over five hundred employees. Furthermore, it’s against federal law for the department to use federal Unemployment Insurance (UI) funding, including staff and technology, for non-UI purposes. 

The next bad idea would allow state managerial employees to collectively bargain by changing the definition of manager.  

Mr. Ricci wrote, “Collective bargaining was designed to be an adversarial process with negotiator’s balancing the interest of employees, supervisors, managers, and the taxpayers. Yet, all too often, the taxpayers are forgotten even though these agreements are funded with tax dollars. 

Furthermore, this would result in unions essentially negotiating with themselves. Labor has an adage that says, ‘If you’re not at the table, you’re on the menu.’ Yet, if this proposed legislation became law the union would occupy both sides of the table — with the taxpayer’s credit card in hand.” 

Even a broken clock is right twice a day. The committee is taking a positive step forward in ensuring transparency between the state and municipalities by making complaints, substantiated by evidence of wrongdoing, against a state or municipal employee to be accessible by other municipalities and states should an employee resign from their position prior to completion of an investigation of that complaint. 

The bipartisan bill will assist the government in hiring decision-making and help protect the public and current employees that may work with a prospective hire 

Mark Your Calendar 

This Monday (Feb. 27) several bills will be discussed in public hearings, and each would only increase taxes on our already over-saddled families and businesses.

SB 774An Act Adjusting Certain Marginal Rates for the Personal Income Tax and Establishing a Capital Gains Surcharge 

This will increase income tax, running contrary to Gov. Ned Lamont’s income tax cut proposals. Bad ideas need to be nipped in the bud, regardless of their likelihood to pass; for everyone’s awareness, the top 2% of income earners in Connecticut pay 40% of the income taxes, and the bottom 54% pay 4%. 

SB 776An Act Concerning a State-Wide Property Tax on Certain Residential Real Property 

Dubbed the ‘Mansion Tax,’ this will establish a state-wide property tax on real property with assessed values of more than $1.5 million. Again, while that may not impact you directly and goes after the ‘rich’ to pay their ‘fair share,’ Connecticut already suffers an exodus of wealthier residents who — as mentioned above — pay the most in taxes, funding the government’s programs. Additionally, what about farmers’ whose property value might exceed $1.5 million?    

HB5673: An Act Concerning the Reformation of Certain Taxes and Tax Equity 

While the bill’s purpose is, ultimately, to “reduce taxes for middle-income taxpayers and seniors,” the state currently has a surplus. Why would we risk increasing taxes on businesses or anyone at this point (or ever)? For example, this bill will establish a state-wide property tax at the rate of 2 mills on commercial and residential real property with an assessed value of more than $1.5 million, as well as increase the rate of the corporation business tax to eleven and one-half percent.   

Click here to submit written testimony 

Click here to sign up to testify either in person or virtually 

Meghan Portfolio

Meghan worked in the private sector for two decades in various roles in management, sales, and project management. She was an intern on a presidential campaign and field organizer in a governor’s race. Meghan, a Connecticut native, joined Yankee Institute in 2019 as the Development Manager. After two years with Yankee, she has moved into the policy space as Yankee’s Manager of Research and Analysis. When she isn’t keeping up with local and current news, she enjoys running–having completed seven marathons–and reading her way through Modern Library’s 100 Best Novels.

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