Proposals to Restore Fairness, Reduce Budget Gap

One of the best ways to improve Connecticut’s economy is to promote fair tax policy. Another way is to make wiser use of taxpayer dollars to help solve the state’s budget crisis.

The Finance Committee approved two proposals that move the state closer to those goals  CBIA supports SB-433, which clarifies that the standard of proof in tax cases where there is no allegation of fraud is a “preponderance of the evidence.”

Specifically, a taxpayer challenging a Department of Revenue Services ruling before the state tax court must prove its case by a preponderance of the evidence—instead of the higher standard of “clear and convincing proof” that the court has been using in tax cases.

In Connecticut, the clear and convincing evidence standard usually only applies in cases involving civil fraud or other serious instances in which a very high degree of certainty is required.

Preponderance of the evidence is the standard used in most civil cases and is more appropriate for tax appeals. The concept behind this bill was put forward by CBIA’s tax committee. With the state facing very serious budget deficits and a slowing of all types of revenue, policymakers need to find innovative ways to save significant taxpayer dollars.

CBIA is also supporting SB-443, which follows the recommendations of the governor and state treasurer to cancel many of the state’s old bond authorizations, which will free the State Bond Commission to use the dollars elsewhere.

Over the years, billions of dollars have been authorized by the legislature to meet the state’s needs for a wide variety of special projects, but many millions have never been actually used.

In her State of the State speech, Gov. Rell said, “If a project is not worthy enough to be approved after five or more years then we probably shouldn’t bond for it and pay twenty years of interest on it.”

What’s more, having the old bond authorizations on the books also could weaken the state’s credit agency ratings because they are considered liabilities.

CBIA supports both proposals and appreciates the Finance Committee proposing these measures and voting to move them forward.

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.