Property Tax Hike Will Impact Jobs
Experience shows that raising taxes will slow Connecticut’s economy but won’t solve the state’s fiscal challenges.
Amid widespread concern about property taxes, one “reform” proposal in the legislature actually will mean higher property taxes for most, if not all, job creators in the state.
SB 1 was approved by the Planning and Development Committee and is making its way to the Finance Committee.
Among other things, the third portion of SB 1 will create:
- A new property tax (“municipal contribution to the area-wide tax base”) for commercial and industrial job creators over and above what currently exists, and applying to all factors, including new construction, market value appreciation, and revaluations. This could financially encourage municipalities to inflate the assessments of commercial and industrial properties in an effort to “make back” some of the revenue that may have to be shared with the region.
- A discriminatory “property tax sharing system” with a commercial and industrial mill rate separate from, and likely higher than, residential properties
Clearly a multi step, discriminatory property tax classification scheme that unfairly increases property taxes on job creators will make Connecticut a less desirable place to locate.
CBIA continues to urge lawmakers to reject this proposal because it is too costly for Connecticut.
Strategic tax policy
Other proposals would hike taxes on Connecticut’s job creators and impact their ability to drive the state’s economic recovery.
Speaking at the recent Connecticut Business Day, some of the state’s largest job creators highlighted the value of strategic tax policy that’s growing jobs and driving our economy. They also showed how measures contained in the governor’s budget proposal (SB 946) would seriously weaken that tax policy.
By reducing the value of key investment incentives for research and development (R&D) and other key economic activity, SB 946 effectively raises taxes only on companies investing in Connecticut.
It also reduces the net operating loss carry-forward (NOL), an important tool and prerequisite to attracting and retaining businesses in Connecticut, especially those with significant, up-front investment costs.
The proposal also extends the 20% corporate surcharge that was due to expire and keeps our corporate tax rate stuck at 9% (sixth-highest in the U.S.), making Connecticut much less competitive.
Connecticut needs serious spending reform that will put the state on better financial ground, eliminate the need for economy-slowing tax increases, and make us more competitive for jobs.
For more information, contact CBIA’s Louise DiCocco at 860 244.1169 or firstname.lastname@example.org.
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