NB Politicus

Did Stewart Get A Prohibited Campaign Freebie In Mailing Of Car Tax Bills?

Posted in city government, city politics and government, ethics, municipal budget, Republicans, Tax Policy by nbpoliticus on September 2, 2017

By John McNamara

New Britain motor vehicle owners finally got their bills on September 1 along with  a glowing missive from Mayor Erin Stewart that makes the case for her re-election.

The city held up auto tax notices this year, blaming the state budget impasse for the two month delay. Uncertain was whether the auto levy would be lowered to 32 mills or stay at 37.  Given the state deficit then and now,  it would have been a safe bet to go with the 37 mill rate in July rather than wait.  The $241.5  million municipal budget for the year that began July 1st is based on what New Britain got from the state in the 2017 fiscal year.

In a city election year the delay in mailing tax bills is giving incumbent Stewart a prohibited taxpayer-funded freebie — an expensive city-wide mailing to everyone who owns a car or truck — to boost her campaign closer to the election.

Don’t expect Stewart and her full-time image team in the Mayor’s office  to miss an incumbent’s prerogative of using public funds to deliver a not so subtle piece of campaign promotion. Normally there’d be nothing wrong with it.  It’s done here and in many places all the time — an advantage to incumbents in local races with no public financing

Brochure advancing Mayor Stewart’s candidacy sent with motor vehicle tax bills this week. State law bars use of public funds for candidate promotions within three months of elections.

The issue usually arises over “franking privileges” for state and federal lawmakers who send their own positive mailers back to their districts on accomplishments and legislation.

At issue here is whether Stewart used the good offices of the Tax Collector to promote her candidacy within three months of an election.  That’s where the Connecticut General Statutes come in. State law prohibits any use of taxpayer money by incumbents within 90 days of an election for self promotion.

From Connecticut general statutes 9-610

(d) (1) No incumbent holding office shall, during the three months preceding an election in which he is a candidate for reelection or election to another office, use public funds to mail or print flyers or other promotional materials intended to bring about his election or reelection.

Using her campaign slogan “Leading The Way” in the taxpayer-funded brochure, Stewart cites saving the city from fiscal ruin, good bond ratings, reorganizing city hall departments “to find efficiencies and improve customer service and “a continuous commitment to provide our teachers and our children with the proper tools for learning and exploring.”  The official message is a carbon copy of what can be found on Stewart’s campaign website.

Any and all of the Stewart’s tax mailer assertions, of course, can be challenged in an election year.  A closer look at the  municipal budget shows higher spending  trumps efficiency at City Hall. A hefty jump in interest payments looms on short-term borrowing because Stewart and the Common Council deferred on paying bills coming due last year. And that  “continuous commitment” to education?  It’s  hard to find in a Stewart budget that continues to spend more at City Hall but didn’t add a dime to schools in the current budget.

In politics timing can be everything and can determine what is allowed and what isn’t under the law.

By incorporating her campaign promotion in the late auto tax notices , Mayor Stewart ignored the law that bans incumbents from using public funds “to mail or print flyers or other promotional materials” for reelection.

 

 

“Revolutionary” State Budget? Property Tax Relief, New ED Aid For NB Is Part of Democratic Package

by John McNamara

A tentative agreement among Democratic leaders on a biennial state budget  that begins July 1st appears to be good news for New Britain and other municipalities in terms of property tax relief and continued aid to the under-funded city schools.

Late Saturday (May 31) Democratic legislative leaders and representatives of the Malloy Administration agreed on a revenue package that will drastically cut the car tax. The measure will set aside the city’s property tax rate of 49 mills on vehicles and cap the tax for cars to no more than 29 mills in a statewide formula.   The levy on vehicles will be in effect for the 2015 tax year if OK’d in a final vote. At the same time the plan will designate a percentage of sales tax revenue for transportation and new funding to cities and towns to reduce burdens on property taxes.

New Britain's legislative delegation will wrap up the 2015 session June 3. From left Rep. Bobby Sanchez (25), Rep. Peter Tercyak (26), State SenatorTerry Gerratana (6) and Rep. Rick Lopes (24). Absent from photo is Rep. Betty Boukus (22)

New Britain’s legislative delegation will wrap up the 2015 session June 3. From left Rep. Bobby Sanchez (25), Rep. Peter Tercyak (26), State  Terry Gerratana (6) and Rep. Rick Lopes (24). Absent from photo is Rep. Betty Boukus (22). ( F Gerratana photo 2014)

The Democratic package, if approved by the Legislature, represents the most significant change in Connecticut’s tax structure in decades, making the system more progressive and fairer to New Britain and other cities.

Taxes will most certainly  increase by a smidgen for high-income individuals with the ability to pay. For most citizens burdened by one of the nation’s heaviest property tax burdens there is relief.  State Senate President Martin Looney (D-New Haven) called the proposal “revolutionary” and said “this budget meets the state’s obligations and provides historic property tax relief for the people of Connecticut,”  It includes provisions to:

–  Raise the income tax rate on millionaires from 6.7 to 6.99 percent

–  Maintain the state sales tax at 6.35 percent and designating half a percent each to local property tax relief and the Malloy transportation initiative. Proposed sales taxes on accounting, engineering, advertising and dry cleaning were eliminated from the plan.

– Triple the tax on computer and data processing from 1 to 3 percent.

– Adjust Payment In Lieu of Taxes (PILOT) grants to municipalities with high mill rates where state property and nonprofit institutions hold significant amounts of property.

As the legislative session ends New Britain’s legislators have been mobilizing to retain a fair share of municipal aid,  support state-funded programs and maintain New Britain’s share of education funding.

Details will be forthcoming over the next several days, but it is likely that the delegation has succeeded and the city will improve on the $85 million (covering 68%)  it now gets under state cost sharing formula to underwrite the education budget proposed by the Stewart administration at a flat-funded $124,183,673.

Despite billion dollar deficits confronting the Malloy administration and legislators in  state budgets since 2011, New Britain’s education aid has steadily increased over the last four years.  It will do so again if the budget package wins approval by Wednesday, June 3.

To be sure New Britain schools will remain under-funded in comparison to comparable communities in the absence of more equity in the way educational funding is distributed. The state budget package now on the table, however,  is a step in the right direction.  New Britain has fallen behind more sharply than others because of a consistent pattern of the city setting budget priorities that stiffed the schools year after year, but increased spending in municipal government. This year is no exception.

Attention now turns to the adoption of the municipal budget. The Common Council is due to act on  the Stewart Administration’s $224,757,851 budget and 49 mill tax rate by mid-June.  No matter how the city acts there is now room for optimism on property tax relief and education aid given the prospect of a “revolutionary” state budget plan being adopted.

Absentee Landlord Licenses, Fees Exist In Many Communities

Posted in Housing, municipal budget, Tax Policy by nbpoliticus on October 6, 2012

Updated November 21, 2012: Legitimate concerns about the city’s licensing of absentee landlords (all owner-occupied dwellings are excluded) have been drowned out by a phony anti-government coalition fueled by out-of-town interests and a failed GOP leadership seeking once again to use divisiveness for political gain.   The well-publicized and well-financed campaign of distortion is  now replete with paid protestors, intimidation of tenants and outrageous lies about the ordinance and who would be affected by it.

The absentee landlord lobby frets and whines that if this happens in New Britain, it will spread to other communities.  What they don’t want you to know is licensing and fees for absentee owners and investment properties exist from the Redwood forests to the New York highlands as a means of maintaining housing stock and improving landlord and tenant relations.  As the following post from NB Politicus noted in early October  the absentee landlord law suit flies in the face of similar ordinances in Connecticut and around the country, including laws that go far beyond what has been proposed for New Britain.

On October 4th, New Britain’s Common Council adopted new fee ordinances on landlords owning non-owner occupied, multi-unit apartments  —  policies designed to raise an alternative source of revenue as well as to strengthen anti-blight enforcement in multi-unit housing.

The $150 per unit flat fee represented a compromise over an earlier proposal that the Council’s Planning and Development committee left on the table. It will raise an estimated $1 million on rental properties with absentee owners.

A second ordinance known as a “hot-spot fee” would charge landlords $500 when emergency and public safety personnel are called to an apartment house five or more times in a year.  It is expected to generate another $1 million.

The combined measures can avert some service cuts and improve the anti-blight efforts as Mayor O’Brien and the Council seek to fill a $4 million hole growing out of  the structural deficits identified in the last fiscal year when O’Brien took office.  Clearly, they are not a panacea for the budget woes that stem from nearly a decade of gimmickry and one-short revenues of prior administrations. The license fee  is part of a strategy to avoid regressive taxation in tough fiscal times: raising the property tax  always falls disproportionately on homeowners and those least able to afford it.

The Common Council’s actions occurred amid a raucous and at times churlish crowd of opponents prominently led by the statewide landlord lobbying group which opposes the fees and previously opposed tougher anti-blight measures that the O’Brien Administration has adopted.

According to press reports, Bob De Cosmo, president of the Waterbury-based Connecticut Property Owners, said his group will file a class-action lawsuit against the city.  In an effort to bully and intimidate city councillors DeCosmo was quoted as saying “we will be looking into suing each individual council member that voted for this illegal tax.”

The hollow threat of a legal fight over the modest New Britain flat fee flies in the face of policies and fees that are found in many other  communities throughout the country and that have been on the books for a good long time.

In Connecticut, for example, Stamford has an annual fee structure on multi-family units tied to housing code enforcement: a $60 fee and $30 per additional unit for three to nine apartments; $75 and $40 per additional unit for 10 to 39 apartments, and; $200 fee and $60 per unit for 40 or more apartments. Sounds doubtful absentee landlords will dump their New Britain properties to go buy dwellings downstate.  Nor will they pull up stakes and go to places like Gainesville, FL, North Chicago IL, Burlington, NJ, Cedar Rapids IA, Salt Lake City UT, Minneapolis, MN (and many more). They’ll find landlord fees and licenses and charges for rental units in all of them.

One other thing municipalities here in Connecticut and elsewhere have as a sensible part of housing policy is a Certificate of Occupancy ordinance. That was lost to New Britain in the 1980s when Tom Bozek was the Council majority leader.  It would be a feather in the cap to Mayor O’Brien and the Council to restore the CO ordinance, not just for fees but to fairly handle the rights and responsibilities of landlords and tenants.

The Mayor and Common Council clearly didn’t deserve the insults and push back at the Council meeting from some of the attendees, particularly absentee landlords who need to learn a lesson in shared sacrifice without diminishing a return on their investments. They need to be responsible members of this community whether they live here or not.

Op-Ed: CEOs Rewarded for Corporate Tax Dodging

Posted in Corporations, Tax Policy by nbpoliticus on September 5, 2011
Other Words Op-Ed: Week of September 5-13
For an elite group of American CEOs, sacrifice is for chumps.
As the nation struggles with budgetary constraints, Congress has exempted a group of imperial CEOs and their companies from contributing to the solution.
High Wire CEO  by Khalil Brendib  www.otherwords.org
One special group of CEOs enjoys huge compensation packages while presiding over companies that pay little or no taxes. Twenty-five companies paid their CEOs more last year than they paid in U.S. corporate taxes, according to a new report from the Institute for Policy Studies that I co-authored.
Instead of building better products or providing superior customer service, they spend millions to lobby Congress to change the tax laws so they don’t have to pay.
The ranks of these profitable tax dodgers include Honeywell, General Electric, Verizon, eBay, International Paper, Boeing, Dow Chemical, Ford Motor, and Qwest Communications.
John Lundgren, the CEO of toolmaker Stanley Black and Decker, got a 234 percent pay hike in 2010, bringing his compensation to $32.6 million. Meanwhile the company is shedding thousands of jobs and moving more operations and profits offshore. They have 50 subsidiaries in offshore tax havens. Instead of paying taxes, they collected a $75 million refund.
Twenty of these 25 companies spent more money lobbying than they paid in taxes. When confronted by their tax dodging, their PR flaks complain, “We are just obeying the law.” Last year, these 25 companies spent $150 million to influence the law, through lobbying and campaign expenditures.
These companies win gold medals in accounting gymnastics, using subsidiaries in low- or no-tax countries to avoid their tax obligations. Here’s how the game works: A corporation pretends its profits are earned in offshore subsidiaries while its losses are incurred in the United States. At tax time, these corporations report to Uncle Sam that all they have are losses. Together, these 25 companies have 556 subsidiaries in tax havens like the Cayman Islands, Ireland, and Bermuda.
These U.S.-based companies use our taxpayer-funded infrastructure, including roads, bridges, broadband, and transportation. They benefit from taxpayer-funded research and spin-off products like the Internet, advanced jet engines, and drug research. Their corporate assets are protected by the U.S. military, police departments, and firefighters — and they rely on our U.S. justice system to defend their intellectual property.
Yet 20 of these companies paid no taxes in 2010. They didn’t chip in one dime to pay for the services they enjoy — and that contribute enormously to the success of their businesses. Five companies paid symbolic amounts of taxes, less than the paychecks of their CEOs. But most, in fact, collected checks from Uncle Sam.
We taxpayers just hired Boeing for $35 billion to build new aircraft for the U.S. military. Honeywell also receives huge U.S. government and military contracts. But we don’t require either company to pay a nickel for national defense or public services.
As wages for most Americans have remained stagnant over the last several years, these imperial CEOs saw their compensation jump 27.8 percent between 2009 and 2010. The average CEO of an S&P 500 company collected $10.8 million in compensation. But the CEOs of these notorious tax dodgers were paid an average of $16.7 million in 2010.
Shareholders should reward CEOs for building better products or delivering better services, not for accounting gymnastics that game their tax bills down. Shareholders at Stanley Black and Decker are trying to reverse their CEO’s pay grab.
Congress should pass the Stop Tax Haven Abuse Act, which would generate an estimated $100 billion in revenue annually. It would save jobs at patriotic U.S. companies that are forced to unfairly compete with corporate tax dodgers on an unlevel playing field.
Our nation needs all hands on deck, with everyone pulling their weight to address our fiscal challenges. As we try to recover from the worst economic depression since the 1930s, middle-class taxpayers and domestic businesses shouldn’t have to carry these slacker companies on their backs.

Chuck Collins is a co-author of the new Institute for Policy Studies report, “Executive Excess 2011: The Massive CEO Rewards for Tax Dodging.” www.ips-dc.org