New Haveners Back Tax Hikes For Rich

New Haveners traveled virtually to Hartford Monday to issue a call: Increase taxes on the wealthy who have thrived during the pandemic, and send money back to the poor and working class who have been hit hardest by Covid-19.

City residents offered that testimony during the first four hours and counting of an online public hearing hosted Monday morning by the state legislature’s Finance, Revenue and Bonding Committee. The virtual hearing was live-streamed on YouTube.

The New Haveners testified in support of a suite of such progressive tax proposals designed to achieve a ​“recovery for all” — as suburbanites slammed New Haven State Sen. Martin Looney’s proposed new ​“mansion tax” as ​“theft” by profligate big cities from frugal small towns.

The 12 New Haveners who showed up during the first hours of what promised to be a marathon public hearing all threw their support behind two related proposed bills.

Those are Proposed Senate Bill 821: An Concerning the Reformation of Certain Taxes and Tax Equity and Proposed House Bill 6187: An Act Concerning the Restructuring of Certain Taxes and Tax Equity.

The former was co-introduced by, among others, New Haven State Sen. Gary Winfield and Hamden State Sen. Jorge Cabrera. The latter has the backing of such local state representatives as Robyn Porter, Roland Lemar, Michael DiMassa, Michael D’Agostino, and Josh Elliott.

The two related pieces of proposed legislation would push forward a priority of local progressive tax reform advocates: transferring money from the wealthiest in the state towards the poor and working class in the form of expanded tax credits, direct payments, and fuller funding for state and local social services.

Some of the provisions included in the two nearly-identical bills are higher income taxes for those who make more than $500,000 a year, higher corporate taxes for companies that make more than $100 million a year, new taxes on capital gains, dividends, and interest incomes, and $500 checks for everyone who received state unemployment benefits during the first nine months of the pandemic.

“There’s huge wealth in this city and state,” said Hill Alder Ron Hurt (pictured) during his public testimony before the committee. ​“Those who have that wealth have to pay their fair share.”

Democratic Town Committee Ward 27 Co-Chair Beryl Benson agreed. ​“New Haven is a city that has a lot of challenges,” she said Monday morning. ​“It is a city that needs more resources. It’s not fair that some of the wealthiest in our state have so much, while others have so many struggles.”

Former City Hall staffer and current SEIU representative Rick Melita spoke of how disparately people at different ends of the income scale have fared during Covid19.

“Because we live in a system deeply invested in maintaining income and racial inequality, it should come as no surprise that this plague hit low-wage workers and communities of color the hardest,” he said. ​“It doesn’t have to be that way. We can build a community that benefits us all. We can build Connecticut not only back, but better.”

Through these proposed tax changes, he said, the state legislature’s finance committee ​“can protect the economic wellbeing that a just society needs to fix a system that automatically generates arbitrary and unsustainable inequalities.”

Tax Reform Supporters: ​“Austerity Is A Choice”

Proposed HB 6187 and proposed SB 821 include a range of mirrored proposals for changes to the state tax code. Those include:

• Establishing a surcharge of 5 percent on capital gains, dividends, and interest income.
• Increasing the corporate tax rate to 11.5 percent on companies with gross annual revenues of $100 million or more.
• Increasing the income tax rate to 8.82 percent for unmarried individuals who make over $500,000 and for heads of household and married couples who make over $800,000.
• Increasing the income tax rate to 12.696 percent for unmarried individuals who make over $1 million and for heads of household and married couples who make over $1.2 million.
• Expanding the state earned income tax credit to 50 percent of the federal EITC.
• Sending $500 checks to all individuals who ​“experienced economic hardships due to the COVID-19 pandemic” and received unemployment benefits between March 15 and Dec. 31, 2020. and received unemployment compensation benefits between” March 15 and Dec. 31, 2020.
• Establishing a state child tax credit.
• Establishing a 10 percent tax on digital advertising revenue generated in the state by any business with annual worldwide gross revenues exceeding $10 billion.
• Establishing a 2 percent tax on the portion of assessed value of any owner-occupied residence exceeding $1.5 million in value.
• Eliminating the $15 million estate tax cap and reducing estate tax exemption thresholds.

The New Haveners who testified virtually on Monday, including many from the local labor advocacy group New Haven Rising, backed these proposals as necessary remedies for the immediate economic shock caused by the pandemic and for longer-standing structural inequalities they said are baked into how the state collects revenue.

Nearly every New Haven speaker criticized Gov. Ned Lamont, a Democrat and businessman from Greenwich, for opposing any kind of tax increase on the wealthy in this biennial state budget.

Unidad Latina en Acción member Guadalupe Garcia spoke in Spanish — translated into English by fellow immigrant rights advocate Meg Fountain — about how she’s lived in New Haven for 17 years, worked for a local hotel for 14 years, and was laid off last year due to the pandemic.

She lost not only her job and wages, but also her employer-provided health insurance.

“I have been scraping by with very little work and almost zero income” since then, she said.

Garcia said she also came down with Covid in December, causing her family to go into quarantine.

“We almost died of hunger.”

“These bills would make a difference between a state that excludes and a state that includes,” she continued. ​“You have an opportunity to be the heroes of the working class and to guarantee a dignified good life for the people of this state. … I want to have an economic stability so that I can guarantee the same good life to my children that you give to your children.”

New Haven Rising organizer and Leadership, Education and Athletics in Partnership, Inc. (LEAP) staffer John Lee spoke of working with students at King Robinson who told him that they were hungry during school, and that ​“being hungry was causing them to disrupt class and get into fights.”

LEAP started an after-school supper program that feeds 300 kids, he said. But the resources provided for such supportive services don’t match up with the need.

“That’s an abundance of resources and wealth in our city and state,” he said. ​“It’s just amassed by a few individuals and institutions.”

Benson agreed that the city needs more resources for additional after-school and youth employment programs.

“We know that violence increases during and after economic crises,” she said. ​“We cannot wait for more investment in our youth.”

Yale physics graduate student and Local 33 lead organizer Kimberly Cushman said that Yale’s $31 billion endowment and $203 operating surplus are evidence enough that the wealthiest in the state are doing just fine during the current pandemic, and can contribute more to cash-strapped cities like New Haven.

“Austerity is a choice,” she said. ​“By paying slightly higher income and property taxes, the richest in Connecticut would be able to contribute to racial and economic justice that our state needs.”

In separate testimonies, New Haven legal aid attorneys James Bhandary-Alexander and Sheldon Toubman detailed how their low-income clients would benefit tremendously from increased investments in reentry services, public transportation, rental assistance, and expanded state healthcare access, and would be disproportionately hurt by such Lamont-proposed cuts to the Medicare savings program and to the Connecticut Diaper Bank.

Connecticut does indeed face a challenging budget situation, Toubman said.

But this is a ​“self-imposed situation because of the unwillingness to consider reasonable revenue. We can do better. It is time to ask those with the highest incomes who have done very well during the pandemic to contribute their fair share to a meaningful post-pandemic recovery so that these kids of essential programs can be preserved and expanded.”

“Mansion Tax” = ​“Let’s Rob Peter To Pay Paul Tax”?

Suburban critics of New Haven-backed tax reform on Monday zeroed in on a different city-sponsored bill: a so-called ​“mansion tax”—Proposed Senate Bill 171: An Act Establishing A State-Wide Tax On Real Property—which has been proposed by New Haven State Sen. and President Pro Tem Martin Looney.

That proposed bill would establish a one mill state-wide tax on commercial and residential real estate worth more than $430,000. Looney has said that the new tax would require the owner of a $500,000 house to pay an additional $50 a year.

Suburban residents like Deborah Schultz of Woodbury were having none of it.

She said she has lived in Woodbury for 40 years. She and her husband live in a 2,600 square foot house, and bring in less than $100,000 a year on their combined fixed incomes.

She said calling such a proposed bill a ​“mansion tax” is an insult. ​“It’s more accurate to call it a ​‘Let’s Rob Peter To Pay Paul’ tax.”

Schultz said that the state legislature’s plan for for filling budget deficits and supporting cash-strapped cities like Hartford and New Haven ​“seems to always be to steal more from the citizens and local towns who have been able to manage what they receive.”

She also criticized a related bill, Proposed Senate Bill 172: An Act Establishing A State-Wide Assessment To Encourage Affordable Housing In The State, as ​“an extortion bill.”

“We don’t need additional threats from big city legislators.”

Finance Committee House Chair and Guilford State Rep. Sean Scanlon (pictured) said that, regardless of whether or not one supports the proposed bills before the committee, one has to recognize that ​“the challenges that you face in Woodbury pale in comparison to the challenges that other communities in the state face.”

“These bills may not be the right solution,” he said. ​“But the problem still exists.”

New Canaan’s James Basch (pictured) was equally critical of the proposed ​“mansion tax.” He said that bills like these have only driven his fellow Fairfield County neighbors away from Connecticut to states like Florida, South Carolina, and Arizona.

“Homes are the foundations of everything,” he said. ​“It’s cutting off one’s nose to spite one’s face.”

He recognized that cities like New Haven face serious fiscal challenges.

“New Haven’s issues aren’t just passive,” he said. He noted that the city’s 49-year-old police chief is about to retire and will receive over $100,000 for his pension.

“Clean up your own governance and budget management and stop being beholden to special interest groups for votes,” he told New Haveners.

Kent resident Joseph Agli said he supports Lamont’s pledge not to raise taxes, and opposes bills like SB 171 that ​“target the so-called wealthy.”

The state is getting billions of dollars this year in federal pandemic-era relief, he said. ​“Senate Bill 171 is simply wrong and is not needed.”

The only person to speak up in support of the proposed ​“mansion tax” during the first four-plus hours of Monday’s hearing was New Haven Mayor Justin Elicker (pictured).

He praised the state legislature for approving a Payment in Lieu of Taxes (PILOT) reform bill earlier this session which promises a tiered approach to distributing state aid to municipalities most in need.

That new tiered approach needs to be funded, he said, and SB 171 could provide one such way to support a beefed-up PILOT.

Cities like New Haven provide a host of employment, healthcare, and cultural services to wide swaths of the state, he said, and yet they’re hampered by a reliance on the local property tax — which is further exacerbated by hosting so many tax-exempt nonprofits.

“There’s not one perfect answer to this problem,” he said, ​“but Connecticut must act urgently to seriously reform the current system, where we continually leave our poorest areas behind.”