Tax debate highlights CT’s affordability issues

For East Hartford resident Torrina Evans, it’s about long, stressful nights spent figuring out how to make ends meet on the low pay she draws in disabilities services.

For Woodbury’s Deborah Schultz, it comes down to how much more she’ll have to shell out in retirement, dipping into a lifetime of earnings she and her husband saved over the years.

Dozens more weighed in Monday, as the General Assembly initiated debate on a trio of bills that would reshape portions of the state’s tax code — notably to include what many are describing as a “mansion” tax, which would allow the state to collect property taxes on homes worth more than $430,000 as determined by municipal clerks.

On Monday, Gov. Ned Lamont said he was “not supportive” of the tax proposals discussed in the session.

“We just got $10 billion from the federal government — some of it [is] direct payments that will be a shot in the arm for our economy, and about half of it which we have discretion over which will be helpful for education, for rent relief, .. for our notfor-profits,” Lamont said. “I’m going to be working closely with the legislature to figure out what our priorities are for that money. I think we’re in pretty good shape right now.”

Sen. Martin Looney, DNew Haven, proposed the mansion tax in January. It would allow the state Department of Revenue to collect taxes equal to the rate of one mill on real estate values, with the first $300,000 exempted on the assessed value on any home and no exemption for commercial properties. (One mill is equal to a dollar on $1,000 of assessed value.)

“My husband and I live in a 2,600-square-foot home, which we love, but is by no means a mansion,” Schultz said at a public hearing of the legislative Finance, Revenue and Bonding Committee.

But Evans and others said the state needs to do a better job of apportioning how it taxes and spends — the “mansion tax” as a prime example — to help those lower down on the pay scale, or at least avoid making cuts that will hurt them even more.

“With the wages we earn, I find it very difficult to support my family,” said Evans, an East Hartford resident who works for the Oak Hill disabilities services agency. “We are being given crumbs as hazard pay and being asked to put our lives and our families’ lives on the line . ... Who would want to spend 40-plus hours a week doing backbreaking work for poverty wages?”

Roughly 300 members of the public — including advocacy groups, business owners, public officials and economists — filed their intent to testify Monday.

The discussion was a rehash of past years — do wealthy earners and businesses pay enough to the cash-strapped state? — couched inside a killer pandemic that has hit hardest the poorest pockets of the Connecticut economy.

Senate Republican Leader Kevin Kelly, R-Stratford, said Looney’s proposal was “designed to suck money out of the middle-class and send it directly to Hartford Democrats to redistribute at their discretion.”

Opponents of higher taxes in Connecticut have long countered that hikes only make it more difficult to keep jobs in Connecticut, whether as a result of corporations hiring here or executives’ choices for where to live.

Last week, Subway confirmed that it has opened a corporate office in Miami where new CEO John Chidsey has a Coral Gables home, at the expense of jobs at its Milford headquarters.

“We’re not just competing against New York or Massachusetts, which has around a 5 percent flat income tax rate,” Basch said. “We’re increasingly competing and losing to Texas, Florida and the Carolinas among other states. Spend some time in Fairfield County, if you don’t believe that people are leaving because of higher taxes.”

In addition to a number of tax code revisions, a bill co-sponsored by several Democratic senators would have the state make onetime payments of $500 to the hundreds of thousands of Connecticut residents who received unemployment benefits last year.

“In this pandemic-inspired downturn, the wealthiest individuals and families have been doing very well,” said David Gamage, an Indiana University law professor. “The most profitable corporations and largest businesses have been doing well. It’s the ordinary, Main Street economic activities that have been suffering. This is a great opportunity in these bills to address these longerterm imbalances... putting money in the hands of ordinary Americans and Connecticut residents and struggling, lower-income families has large beneficial economic effects.”