Legislature approves tax fairness plan.

I am proud to have voted in support of legislation that would make significant reforms to make state's tax systems fairer.

The legislation just approved in the state House of Representatives would, among other things:

• Cut state income taxes for 95% of income tax payers in the state.
• Double the Property Tax Credit tax relief program to $1000.
• Provide relief to thousands of working families with a new state Earned Income Tax Credit.

And the plan, which I voted to support, would cut the gas tax by $.25/gallon through the summer months.

Of course, as with any budget proposal, there are aspects of it that I do not agree with. But the amount of relief that is provided to most people in this state far outweighs these downsides.

There is an analysis of this plan from the legislative Office of Fiscal Analysis. I will post some more of the highlights, later, as well.

The property tax system's deep unfairness: The words of a Stonington resident.

I recently received an e-mail message from a resident of Stonington expressing concern about the deep flaws and unfairness of the property tax system and how it affects him. I think that he raises excellent points. And what he says is particularly important, because it shows that this is a statewide problem - and not just a problem for people who live in central cities like New Britain or inner-ring suburbs like Newington. Reform is needed for the state, as whole.

Here is his message to me...

Dear Rep. O'Brien: This note to you concerns the proposed property tax relief bills in regards to senior citizens. I have tried to follow the various proposals being offered and still do not understand how any will benefit me. In my case, I am 64 years old and retired from government service at the Naval Submarine Base, in December 1997. I purchased my waterfront home in Mystic, CT in 1979 for $86,000. Being single, I happily (dutifully) paid my property taxes to the Town of Stonington, knowing the Town needs funds to operate. Also included in my taxes were ever increasing monies for education costs, even though I had no children. I again paid these taxes so that Stonington schoolchildren would be well educated. So for nearly 20 years, I have contributed to the welfare of my town while earning a lower middle class income of nearly $40,000 and for the remaining 10 years at a retirement income of slightly over $20,000. The value of my house (purchased at $86,000) rose to $376,000 (two revaluations ago) and to $771,000, at the last revaluation (five years ago). We are now going through another revaluation and God only knows what they will value my home at this time. I might add that these values are SUBJECTIVE and not necessarily it’s true value. This could only factually be determined once it was sold. This may become a fact when I receive the new value, that being I most likely will have to sell my home. My taxes now stand at $8,500 a year. Add insurance, mortgage and utility costs and you get close to my annual income, never mind food, clothes, gas for the car, medical bills, etc. I have to ask…is it fair to penalize a citizen who has paid his fair share of the town’s costs for 30 years and now that he is on a fixed income, to be forced out of his home because of the ever increasing property taxes??? Certainly, there can be some assistance to us seniors in our present financial positions. After all, everyone, lucky to live long enough to arrive at their golden years, will be in the same boat, so why can’t some permanent, state-wide program be implemented to freeze senior’s property taxes (based on their actual income) at some designated amount. I realize some of the state’s seniors may be more “well-off” than others and may not need tax relief…or as much. That is why tax relief should be based on their “actual income”. I realize both parties are trying to come up with some meaningful legislation and I appreciate your efforts. However, giving me $500 or $1000 credit on my state income tax doesn’t help me and many, many, others, who don’t earn enough to even pay income tax. Our main area of crisis is the “actual property tax”. I remember not too long ago, grass roots groups were trying to get the assessments moved back to an earlier year and not raise a senior’s assessment until the house was sold, thereby fixing an actual value to the property. This makes so much sense that I wonder why this method is not being enacted. Again, I appreciate your efforts and sincerely hope you can pass some meaningful legislation that will allow us seniors on FIXED incomes, to stay in our homes. If not done in this session, I may very well be gone by the next! Thank you

I thank him for his comments, since responding to him gave me the opportunity to put down in writing some things that are important to me about this issue. Here (with some minor corrections) is what I wrote back...

Thanks so much for your e-mail.

You summarized very well the most severe problems of the property tax system. Unfortunately, of course, it is because you are experiencing them directly.

Even though your income is not high enough for you to even owe state income taxes, you, by the numbers you gave me, pay upwards of 40% of your income in property taxes.

There is a State Senator who continually claims that people in your income range "pay no taxes". But you know from experience that this is not true. There is a lot of talk about the concern of people losing their homes through eminent domain, but far more people lose their homes because of the property tax system. I find it unfortunate that many legislators' response when I bring up the very problems that you are experience answer that many seniors should not be living at home alone, anyway. But they are wrong. You are being treated unfairly.

The thing that most deeply offends me is unfairness. You should not have to give up your home because you cannot afford the property taxes. In fact, it offends me that our state's tax system charges you many times the effective tax rate that people much wealthier than you pay.

Since you contacted me, I assume that you have seen my property tax reform page on my state website...
http://www.cga.ct.gov/hdo/fp/024/proptaxref.htm

This web page has a summary of the property tax reform plan that I wrote a few years ago. This proposal is designed to do exactly what you suggest - making the property tax system fairer by making it depend more on what your income actually is. The plan looks complicated until you apply it. It gives you a credit that lowers your property taxes by 3/4 of the difference between your pre-credit property taxes and your income taxes.

So for you, that would mean that your property taxes would be cut by $6,375 ($8,500-$0=$8,500; $8,500x3/4=$6375). That would lower your property taxes to $2,125.

I estimate that upwards of 75% of people in the state would pay lower total taxes under than plan, and seniors with lower incomes would be especially helped.

The state Property Tax Credit is an attempt to do something similar, and it pre-dates me being in the legislature. I have offered suggestions to use the structure of the Property Tax Credit for much more substantial property tax reform. First of all, if everyone's Property Tax Credit were based on the formula in the plan I wrote, that would target the tax relief to the people, like you, who really deserve the help the most.

Second, and much more important, we would need to make the Property Tax Credit refundable. This means that, even if, like you, your income is too low to owe state income taxes, you could still file a state tax form and you would get a refund equal to the amount of the Property Tax Credit. So, if the Property Tax Credit were $1,000, you would be able to get a refund of $1,000. If we went the step further and made the Property Tax Credit more based on actual income and property tax burden, you would get $6,300 back from the state.

The legislature actually proposed this (making the, then $500, Property Tax Credit refundable) in the last term, but the governor completely refused to consider it. This refundability proposal is not in the current plan proposed by the legislature, but I will continue to press for it.

If we were to have a refundable Property Tax Credit that was much more based on income and actual property tax burden, we could go the step further by allowing taxpayers to check a box on their state tax form that would make it so that the tax credit would apply to their next property tax bill. So, instead of paying property taxes and then getting a refund back from the state, taxpayers would simply have a cut in their property taxes.

Anyway, I thank you very much for your message. This is a very important issue for me. Hopefully, we can win real action that can move the state toward a system that is truly fair.

By the way, would you mind if I include your message and my response to you on my blog? I would not include your name or e-mail address, of course. But I think that the point needs to be made that there are people in towns like your's who are hurting under the property tax system, in addition to the city and town that I represent.

I hope you are having a great Memorial Day weekend!

He wrote back...

Rep. Tim O'Brien: I really appreciate your comprehensive answer to my e-mail. I was almost getting chills reading it as it addressed all of my concerns. I sincerely hope you continue the fight in the legislature to make the tax rate fair for those of us who have paid our fair share of taxes for all of our working years. I realize this session is winding down but I hope some plan for relief will pass. Since I have one more year before the axe falls concerning me staying in my home, I hope a plan such as yours can make it all the way through next year. I really do thank you for your efforts and for letting me know what you have been doing to help us "older folks". By all means, please use my letter as you wish.

It is the real story like this gentleman that makes me want to continue fighting so hard on the issue of property tax reform. My thanks go to him for the points he made. And I hope that we can make real progress before it is too late for him.

Of course, property tax refundability - which is the thing that would really help him - is not in any budget being considered at the Capitol this year. The Democratic budget is so good in so many ways - especially in making the state's tax systems fairer - that it might seem tough to consider adding this to the budget debate. But this was a Democratic proposal in the past, so I will ask the Democratic leaders to push for this in their budget negotiation with the Governor.

The Governor outright rejected this idea in the past, but it is the most effective way that has been seriously considered at the Capitol for providing real relief and fairness for senior citizens like this gentleman.

It is just the right thing to do.

Office of Consumer Counsel supports House electric legislation.

The Office of Consumer Counsel (OCC) is the state agency responsible for representing the interests of consumers in the proceedings of the Department of Public Utility Control on utility issues - including electric rates.

So, with leaders in the state House and Senate divided on the terms of electricity legislation, it is very significant that the OCC has identified the legislation under consideration in the House of Representatives (House Bill 7098) as better for electric ratepayers than the Senate legislation (Senate Bill 1374).

The House bill is better. It would bring electric rates back under control, while the Senate bill would apparently actually increases rates even more.

The OCC did this summary comparing to the two bills...

Principle	Reflected in House Bill?	Reflected in Senate Bill?	Discussion
A restoration of some direct state control over energy costs.	Yes.	No.	Section 58 of the House Bill would require that some new power plants be built and compensated according to cost of service principles as determined by the Department of Public Utility Control, including a reasonable profit. Both utilities and non-utilities can build these plants and take advantage of this opportunity.
Allow some peaking power plants to be owned by the traditional utilities to reduce market risks.	Yes.	Yes, but in a way that leaves the utilities with risks but no rewards.	Section 54 and Section 58 of the House Bill would allow the utilities to own some peaking power plants to mitigate price spikes in the summer. Senate Bill Section 24 would allow the utilities to own power plants but would not offer then a reasonable profit to do so, while leaving them with the risk of cost overruns. Because there is no upside but only downside for the utilities to build, the Senate’s approach is not a realistic proposal to achieve some utility-owned generation that would reduce market risks for customers.
Maintain oversight of conservation dollars under the auspices of the successful Energy Conservation Management Board (ECMB).	Yes.	No.	The House Bill maintains ECMB oversight over conservation and energy efficiency measures, which has proven to be a successful model. Section 2 of the Senate Bill creates an electric efficiency partner program with only limited input and no oversight by the ECMB. The ratepayer contribution is up to 90 million dollars a year. If all goes well, then the ratepayers will get a return on that investment. However, to avoid customer confusion and duplication of effort, the dollars would be better added to the existing Conservation and Load Management Fund overseen by ECMB.

Principle	Reflected in House Bill?	Reflected in Senate Bill?	Discussion
Avoid burdening customers with payments for new equipment without a DPUC analysis of the costs and benefits.	Yes.	No.	Section 7 of the Senate Bill would require the installation of advanced electric meters for all customers on an aggressive schedule without an analysis by DPUC as to whether the benefits will outweigh the costs. CL&P has estimated in DPUC Docket No 05-10-03RE01 that full deployment of this system would cost $255 million dollars, plus the cost of stranding the investment of existing meters of an estimated $25 million a year for ten years. There is no evidence to date that the meters will benefit most customers or cause them to significantly shift their usage.
Achieve a low standard service price that can be enjoyed by residential and municipal customers.	Yes.	No.	Section 55 of the House Bill creates a procurement plan that, in conjunction with the other House provisions discussed above, will stabilize and ultimately reduce the standard service price. Section 23 of the Senate Bill has similar planning provisions but contains other provisions that will actually raise the standard service price. For example, Section 13 of the Senate Bill would subsidize retail suppliers and removes rules that prevent retail suppliers from using schemes to pull their customers onto and off of standard service. The Senate Bill appears to create migration risks that would actually raise the standard service price for all customers. The Senate Bill creates artificial competition for competition’s sake, whereas the House Bill seeks to establish the lowest standard service price for residential and municipal customers.

Principle	Reflected in House Bill?	Reflected in Senate Bill?	Discussion
Avoid disincentives to building new electric infrastructure.	Yes.	No.	Section 1 of the Senate Bill would require the electric distribution companies to submit a plan to the DPUC to sell off part of the high-voltage transmission lines that they are building in order to support other goals such as demand response. This would send the wrong message to others that take on the risk of building infrastructure. To achieve the worthy goal of fostering more demand response, it should be funded directly.
Restore some robust planning processes.	Yes.	Yes, but with more limited options and with less effectiveness than the House.	As discussed above, Section 55 of the House Bill and Section 23 of the Senate Bill, along with other provisions of both bills, will restore some needed planning processes for the essential product of electricity. However, the Senate Bill does not have a realistic proposal for adding some utility-owned peaking power plants to mitigate our market power risks and ensure reliability, which limits our planning options. Also, the Senate’s efforts to push customers onto retail choice may well make supply planning more difficult and less effective.

May 8, 2007 New Britain legislative Update.

Just now available on the web, here is the latest New Britain Legislative Update:

Online Videos by Veoh.com

Included in this Update are Sen. Donald DeFronzo, Rep. Peter Tercyak, Rep. Betty Boukus and me.

Sorry it took a little while to get this together. We had some technical difficulties that we had to work out.

In this update, we have some discussion of the budget process and the proposed by that would be very good for the people of the state.

It also features part of a presentation by former State Commission of Consumer Protection Mary Heslin showing the Polish history display that was at in the Legislative Office Building as part of the Polish Day celebration at the Capitol.

My thanks to Marcin Olechowski for his work filming both our Update and Mary Heslin's presentation.

Message from bloggers on the "social networking site legislation".

I thought I would share an e-mail message that I received recently from a number of Connecticut's prominent bloggers on their concerns regarding the legislation that has been proposed to require regulation of "social networking websites".

This legislation would require that social networking websites keep children from creating accounts on these sites unless the parents of these children give their authorization. It is intended to protect children from online sexual predators.

The motive behind this legislation is good. However, I agree with the concerns raised by bloggers, which they summarize in their e-mail message to legislators:

We are writing to you today on the subject of House Bill 6981, "An Act Concerning Social Networking Internet Sites and Enforcement of Electronic Mail Phishing and Identity Theft Laws." Specifically, this letter addresses the Joint Favorable Substitute made after the public hearing date by the General Law Committee on March 8, 2007 - Attorney General Blumenthal's proposed additions concerning social networking internet sites, which are contained in Section 3 of the bill.

We are writing to request that you oppose the bill in its present form, as the proposed regulations of social networking sites:

-- cannot be consistently met by content providers,

-- will impact a far greater number of internet sites than intended, due to overly broad language in the definition of "social networking internet sites,"

-- will limit protected speech online, including the right to communicate and access information anonymously

By seeking to regulate a wide swath of internet communication in an effort to target crimes conducted in the physical world - namely, sexual violence against minors - HB 6981 will limit the ability of Connecticut residents to access information online, force non-commercial content providers to cease their online operations, and may have serious and unintended ramifications for internet-based commerce and communications of all kinds in- and outside the State of Connecticut.

If these concerns can be addressed through the amendment process, the bill - especially its provisions concerning electronic mail phishing and identity theft - may provide the Attorney General with appropriate legal authority to prosecute crimes conducted via the internet.

Additionally, it may be possible for the General Assembly to achieve the desired effect of the Sec. 3 provisions by formalizing a process by which parents are provided with the tools and information necessary to restrict their child's access to social networking websites. The Attorney General's office has been cultivating an educational program informally for several years, and it is our belief that establishing and funding a state program along the lines of this educational model would not only be the most successful method for protecting minors from contact with child predators online, but would fully protect the ability of adults to access information and communicate via the internet without additional and unintended interference by the state.

Our letter -- including a more thorough explanation of what we believe to be the technical and legal flaws in HB 6981 as written -- is enclosed with this email. Feel free to contact us if we can be of further assistance.

The letter attached to the e-mail is a PDF (similar to this PDF), and it looks very similar to the discussion of the social networking sites legislation by mattw in this MLN post.

The problem with the social networking website legislation is that, to follow it, virtually all interactive websites would have to assume that every person wanting to participate in the site is a minor, unless that person can document that they are not. And that would mean (1) everyone would have to divulge personal information about themselves before they could participate in an interactive website and (2) anonymous participation on the web would essentially be outlawed.

As a case in point, the blog you are reading right now would seem to be affected by this. I would be banned from allowing people leave comments to my blog posts unless they tell me exactly who they are. I have not had a problem with people leaving (polite) anonymous comments on this blog because I think it encourages free speech.

But there are a lot more good reason why anonymous participation on the Internet is important to preserve, and the points in this comment from the MLN post are especially relevant:

HB 6981 doesn't take into account the variety of legitimate reasons why one might wish to communicate or access such information anonymously - security and identity theft concerns, or fear of stigmatization by internet users wishing to access sensitive medical, sexual, political, or cultural information. Even if a selective enforcement approach were used to exclude sites such as Amazon.com or Ebay.com from prosecution under HB 6981, websites which are designed primarily for "social networking" purposes are often used to solicit help or medical advice anonymously: for example, many private groups exist on MySpace.com and Facebook.com sponsored by rape crisis centers, cancer or AIDS support groups, and battered women/children's shelters, and the ability to contact and obtain information from such organizations privately and anonymously is enjoyed by many users of these forums.

There are ideas being considered at the Capitol that would help catch criminals who abuse children, including Internet predators. Catching actual criminals is a lot better way to protect children than creating new rules that would take away much of what is good about the Internet. As the MLN post points out:

The problem the General Assembly and the Attorney General are attempting to address is an important one: Connecticut's children interacting with other internet users - including possible child predators - without their parents' knowledge or consent. But in crafting a law to address this problem, you should take care to allow adults to communicate with other adults, and you should take care to protect the rights of free speech and free assembly - including anonymity and pseudonymity - enjoyed by minors and adults alike on the internet.

Last two weeks.

Sorry I have not been able to post any messages for a while. Things have been very busy, as we approach the end of the legislative session.

There are two full weeks left in the session, with a lot to get done. I have been very frustrated that there has not been more action on some of the more important issues. The things that have been approved so far are not the larger issues at the Capitol. But, at the same time, the major legislation that could be done is still very much alive:

Health Care:
There have been a lot of plans considered to ensure that everyone has quality and affordable health care coverage. Other plans offered would expand coverage to some of the people without health insurance, but would really not take-on the problems of rising costs and lack of coverage that people and businesses who already have health insurance experience.

Having spoken with many legislators, I can say that there is a lot of support for approving legislation that would ensure good health coverage for everyone and lower costs for the people who already have coverage. Getting a plan together, from all of the ideas floating out there, before the end of the legislative session is not easy - but I am still very hopeful that it can and will be done.

Energy costs:
I have been advocating since I was first elected to the legislature for reforms to our state's "electric deregulation law" - the law that has been causing our electric rates to skyrocket.

Last year, it looked like important reforms to start to bring rates back under control were about to be approved. I, like most people, was frustrated that this did not happen. I was hopeful that this important legislation would be approved at the beginning of the legislative session, but it was not then, either.

Rep. Steve Fontana and Rep. Vickie Nardello, the House chair and vice-chair of the Energy and Technology Committee have been working hard to win approval of the legislation that would make a real difference. Unfortunately, others in the legislature have been pushing legislation would actually raise our electric rates even further - and this has held up approval of the Fontana/Nardello legislation.

Hopefully the Fontana/Nardello legislation can be brought to a vote - and that both the House and Senate will approve it, so we can finally end the flawed deregulat system that has cost electric customers so much money.

Fairer taxes and education funding:
Of course, the state budget still has yet to be approved. The budget debate this year is more significant than most years, with very important principles of fairness being considered.

Democrats are still pressing for our proposal to relieve property taxes, support education and lower income taxes for 95% of the people in state. While Gov. Rell has decided to abandon her proposal to raise income taxes on most people of the state, her plan would still have higher taxes for most families than the Democratic plan. Also, only the Democrats' budget would provide needed funding for health care and community services. The Democrats' budget is much better for New Britain and is better for Newington.

The Democratic budget is good. It would advance property tax reform - by both helping cities and towns to lower property taxes and by doubling the state property tax credit to $1000. The Democratic budget would make the state income tax fairer with a tax cut for 95% of the people in the state, asking the wealthy to contribute a little more and helping the working poor with a new state Earned Income Tax Credit. And the Democratic budget would provide important funding for hospitals, health care and community services. I hope the Governor can join together with us and approve this important budget plan.

I started out the legislative session with great hopes for addressing the important issues: property tax reform, health care, education and lowering electric rates. Any one of these things would be a huge accomplishment in one year at the Capitol. But I have remained optimistic that we could get them all done.

Now, we are almost at the end of the session. This is the tense time of the legislative session when things either come together or fail. It is good that all of these important things are still very much do-able. But a lot of work is ahead to get them done.

Health Care videos on the web.

This has been a big year for the issue of health care access, with a real possibility of winning legislation to ensure good quality, affordable health care for everyone. And a fair amount of this discussion has made its way onto the web.

Here are some videos with interesting discussion of this important issue...

Thousands rally for universal health care at the Capitol

Since I was first elected to the legislature, making sure that everyone get affordable and quality health care coverage has been one of my highest priorities. You can see my web pages on this on my personal website and on my state website.

This has been the most exciting year, I believe, in the history of the state on this issue, with sweeping health care reform legislation being seriously considered and legislators more interested that ever to approve a plan to ensure quality health care for everyone.

Today, more than 5,000 people gathered in Bushnell Park, outside the State Capitol in Hartford, to encourage legislators to approve universal health care. I was there, and it was an electrifying event.

CT News Junkie did a story on the rally.

New Britain, I believe had more elected officials present at the rally that any other city or town. In the photo on CT News Junkie, you can see Rep. John Geragosian, soon-to-be Board of Education member Brian Riley and me when we were up on the stage. Rep. Peter Tercyak was up there, too, though he is not in this photo. And New Britain Board of Education President Peter Kochol and Board of Assessment Appeals Chair Robert Wysocki were there, as well as New Britain Democratic Town Committee Chair John McNamara and Town Committee member Phil Sherwood.

You can read more about this issue at www.healthcare4every1.com.

Update, May 6:
Thanks to Spazeboy for his kind words, and for his report on the rally.

Also, Undercurrents, the Hartford Independent Media Center publication, did a story on the rally, as well.

Update, May 7:
Ctblogger has a very good summary of news about the rally on My Left Nutmeg, including this YouTube video, posted by tparty: