Legislative studies abound

(July 17, 2007) Before taking final action on a number of measures that came before the legislature this year, state lawmakers instead took a collective step back to launch studies of several significant proposals.
The most notable studies are those on proposals to cap the property tax, phase out the inheritance tax, establish an earned income tax credit, and enroll Connecticut in the Streamlined Sales and Use Tax Agreement (SSUTA), which would lead to taxes on Internet sales.

Lawmakers also commissioned two studies on what kind of future health care system Connecticut should have. And they asked for a study of Connecticut’s need for affordable housing and how to pursue “responsible growth.”

The results of most of the studies are due to the General Assembly before the opening of the 2008 legislative session in February.

Tax studies

In order to arrive at a compromise, $36 billion state budget for the next two years, lawmakers and the governor’s administration both backed away from several proposals they had made to change the state’s tax system.
Gov. Rell wanted to cap municipal property taxes as part of her budget proposal, which included $3.4 billion in school aid. The increased education funding was designed to take pressure off municipal budgets, and the cap would make sure local governments would spend within their means.

The legislature’s Democratic majority wanted the state to join the SSUTA in order to begin collecting taxes on Internet sales.

The budget-implementing bill approved by lawmakers in the June special session (Public Act 07-4) established commissions to study:

• The impact various limitations on property taxes could have on taxpayers and municipalities
• The changes Connecticut would have to make to the state’s sales and use taxes in order to become a full member of the Streamlined Sales and Use Tax governing board
• Possible implementation of an earned income tax credit
• The impact of the estate tax on Connecticut’s economic competitiveness and the state’s ability to keep residents

Health care

Proposals to move Connecticut toward a government-run health care system were promoted throughout the session but ultimately lacked enough support. During the session, a legislative study showed that a single-payer, government-run system would be phenomenally expensive to the state.

However, legislation that did pass continues the push toward a government-run health care system, because it creates new bureaucracies that will plan for future health care improvements. Public Act 07-185 (SB-1484), among other things, creates two new state authorities to explore future health care reform efforts:

• The HealthFirst Connecticut Authority will examine and evaluate policy alternatives for providing quality, affordable and sustainable health care for all individuals living in this state, including, but not limited to, a statewide single-payer health care system and employer-sponsored health plans.
• The Statewide Primary Care Access Authority will develop a universal system for providing primary care services (to be determined by the authority), including prescription drugs, to all state residents in a way that maximizes federal financial participation in Medicaid and Medicare.

Affordable housing

The budget-implementer act adopted in the special session includes a number of initiatives to encourage the development of housing that is more affordable for low- and moderate-income earners. Among other things, the act creates a Blue Ribbon Commission on Housing and Economic Development to study the state’s short- and long-term housing needs and their impact on economic growth and development.

Education

There is a growing, widespread concern in Connecticut about the ability of the state’s public schools to adequately prepare students for higher education or the workforce. Many believe that high school curricula should be tougher. A group of educators and legislators will form a committee to study high school graduation requirements. The committee will report its findings to the legislature’s Education Committee by Jan. 15, 2008.

Responsible growth

Public Act 07-239 (HB-7090) establishes a Responsible Growth Task Force to identify the criteria that will help guide future state investments and to study land-use laws. The task force will submit a report and recommendations to the governor by Feb. 15, 2008.

Economic growth

The budget-implementer act creates a Small Business Incubator Advisory Board charged with evaluating and recommending changes in the state’s small-business incubator program’s guidelines.
For more information about the studies commissioned by the legislature this year, call CBIA at 860-244-1900.