Opinion
From the Crow's Nest: No challenge on Connecticut agenda
Jun 5, 2008

An ethics bill languishing in the legislature, the Clinton-Obama marathon, a Congressional election battle shaping up in the Fourth District and federal income tax laws that grant charitable deductions for gifts to multi-billion dollar endowment funds are all grist now for the opinion mills.

There is a sense of special immediacy, however, in two issues on Connecticut’s agenda because the General Assembly is scheduled to go into special session next week to consider and, it is to be hoped, finally act on them.

Indeed, the special session should not have been necessary. There is no good excuse for why they eluded legislative decision and the requisite gubernatorial signature during this year’s regular session.

At issue now, a bill to bolster ethical behavior in state government is still, incredibly, controversial after a couple of sessions in the hopper. Also up for action is an extension of the property conveyance tax, worth about $40 million a year in revenues to towns and cities, but still very much anathema to the real estate industry.

Legislative leaders and Gov. M. Jodi Rell have indicated, saints be praised, that they will not reopen the $18.4 billion budget adopted in the regular session and scheduled to go into effect July 1. However, if municipal coffers are denied the funds that come with extension of the real estate conveyance tax, there very well might be pressures for appropriations to offset the lost revenues. The State’s attempts to cope with the faltering economy and mounting budget deficits would regress.

That the legislature should continue to dawdle on the ethics bill is particularly irksome. There’s general agreement on the need for reform, but some powerful political jousting imperils action even after the Government Administration and Elections Committee met last week to seek compromise.

The differences that frustrated previous negotiations continue between the Democratic co-chairmen of that committee, Sen. Gayle Slossberg of Milford and Rep. Christopher Caruso of Bridgeport, rising at times to heated verbal exchanges.

At issue is the extent of reduction or revocation of pensions for elected officials and State employees found guilty of corruption. Senate Democrats, supported by Gov. Rell and their Republican colleagues, want to give judges the authority to make that decision.

House Democrats have been accused of catering to the employees’ union by limiting the extent to which pensions might be cut back. Senate Democrats have balked at Rep. Caruso’s desire to make pension revocations retroactive so they could snare people such as John Rowland, former GOP governor.

In the meantime, hinging on the outcome of the clash between political egos is a bill encompassing worthwhile reforms, such as prohibiting contractors from offering jobs to State employees who had been instrumental in awarding contracts to those firms.

Because there is much that is good in both positions, compromise is attainable. Legislators ought not allow pettiness to prevent them from doing something that needs to be done.

Now to the real estate conveyance tax. It’s too late in the game for tinkering with it. Most municipal budgets already have been adopted and virtually all are banking on revenues generated by this levy. Letting the tax expire on July 1 would be a serious blow to Connecticut’s towns and cities.

Senate Minority Leader John McKinney, Fairfield Republican, has expressed his party’s opposition to a two-year extension, terming it a tax increase at a time when Connecticut residents and businesses are struggling to cope with rising costs
But it’s not really a tax increase. An extension merely continues taxing at existing levels. The alternatives would be to meet revenue shortfalls by raising local property taxes.

In rebuttal, Republicans again are warming up an old chestnut that never has been appetizing. To offset the revenue loss, they would institute an early retirement incentive program for more than 4,000 State employees. Not even their governor found that to her liking when they touted it unsuccessfully to pay for a summertime “gas tax holiday.”

The real estate industry has maintained that the conveyance tax hampers property sales and is unfair because it subjects buyers and sellers to a tax nobody else is required to pay.

In strong support of extension, the Connecticut Conference of Municipalities says that on average the tax adds about $400 to the transaction when a house is sold for $300,000. If there is a slump in sales, it can be attributed to factors of greater impact than the conveyance tax.

So the June 11 agenda is no great challenge. Pass the ethics bill, extend the conveyance tax and then go home.

© Copyright 2008 by Hersam Acorn Newspapers