Education Funding Increases

I have advocated strongly for increased support for our local schools. Here are estimates of the increases in Educational Cost Sharing grant funding for the city and town I represent, New Britain and Newington, in just the past two years.

New Britain                      
year prior            First year                                               Second year
to 2-year             of 2-year                                                   of 2-year
state budget    state budget       INCREASE           state budget            TOTAL
FY 06-07             FY 07-08             first year                 FY 08-09             INCREASE
$64,079,306      $70,813,502         $6,734,196         $73,929,296        $9,849,990

Newington
year prior            First year                                              Second year
to 2-year             of 2-year                                                  of 2-year
state budget    state budget       INCREASE          state budget          TOTAL
FY 06-07             FY 07-08             first year               FY 08-09              INCREASE
$10,386,893        $12,100,397      $1,713,504         $12,632,814         $2,245,921

Of course, I have advocated for significantly larger support than even this, which is why I plan to continue my efforts to advocate for quality education for our kids.

Why property tax reform is needed.

Here is a summary of importance of property tax reform that I put together a few years ago. Some of the information is a bit dated, but the discussion is very much relevant to the debates on this at the State Capitol.

Information on Property Taxes and Why Reform is Needed.

The property tax system is unfair. It is an unreasonable and inadequate way of funding local services and it does harm to cities like New Britain. But the problems that arise from the property tax system in our state are not just limited to New Britain and are even not just limited to central cities. Our over-reliance on property taxes causes problems for towns like Newington and, in fact, the whole state.

Here is a quick overview of these problems:

1. 
   
   Sprawl. The property tax system encourages a pattern of development that undermines the quality of life in Connecticut and stresses our infrastructure. With 169 municipalities competing for property tax revenue that comes from development, small towns change from rural locations into suburbs. The same process stretches urban development beyond the borders of our central cities and into existing suburbs. Meanwhile, more and more economic vitality is drawn out of the established cities – especially as their tax rates increase – leaving them increasing isolated and poor. Central cities, especially, reach a breaking point in which their overtaxed middle class – who have mobility – move out, leaving behind senior citizens and poor residents – who do not have the same mobility – who are then forced to pay even higher taxes.
2. 
   
   Setting generations against each other. In towns and cities across the state, the politics of local budgets are astoundingly similar. Parents, who want a quality education for their kids are set against seniors on fixed incomes who cannot afford to pay more property taxes. It is all too common for towns to have to run multiple referenda before passing a budget, and cities are forced into increasingly precarious budgeting with the growing disconnect between the need to fund schools and basic public services (like public safety) and urban taxpayers’ shrinking ability to pay.
3. 
   
   Inequality. The property tax system produces gross inequality in the way taxation is done in our state. It is seriously unequal in two separate, but closely related ways:

INEQUALITY #1:

The middle class and poor bear more than their fair share of taxes, statewide.

While much ado is regularly made the amount that the wealthiest people in our state pay in the state income taxes, these exhibitions always seem to conveniently leave out certain important facts:

FACT: The state income tax is not the largest tax:

l Income tax revenue: $5.7 billion - 29.9% of state-established taxation.

l Property tax revenue: $6.2 billion - 33.2% of state-established taxation.

FACT: The income tax is not the largest tax burden for most people:

l For only the wealthiest 5% is the state income tax the largest tax burden under state law.

l About three-quarters of Connecticut families pay more in property taxes than they do in the state income taxes.

FACT: Middle class families pay four times as much of their income in property taxes as the wealthiest 1%.

Senior citizens on fixed incomes tend to pay an even larger burden. (I often meet seniors who pay 10%, 20%, even 30% – or more – of their incomes in property taxes, alone.)

FACT: Even with income taxes taken into consideration, the middle class pays twice as much of their incomes as the wealthiest 1% in our state after federal tax offsets are taken into account.

Even without the federal offsets, the middle class pays a 60% more.

INEQUALITY #2:

Property tax burdens are vastly different among municipalities.

There are many reasons for these differences, but there is no question that the differences in income among municipalities is a large reason.

Is it fair that the residents

of these towns pay more . . .

Municipality	Estimated property tax burden for a typical homeowner as a percent of median household income	Median Household Income
HARTFORD	15.3%	$24,820
NEW HAVEN	15.1%	$29,604
NEW BRITAIN	10.8%	$34,185
WATERBURY	13.1%	$34,285
BRIDGEPORT	13.5%	$34,658
NORWICH	7.4%	$39,181
EAST HARTFORD	9.3%	$41,424
TORRINGTON	7.6%	$41,841
WEST HAVEN	7.9%	$42,393
ANSONIA	8.4%	$43,026
MERIDEN	7.8%	$43,237
DERBY	8.0%	$45,670
WINCHESTER	7.4%	$46,671
VERNON	7.0%	$47,816
EAST HAVEN	7.3%	$47,930

. . . while the residents of these towns pay less?

Municipality	Estimated property tax burden for a typical homeowner as a percent of median household income	Median Household Income
DARIEN	6.2%	$146,755
WILTON	6.5%	$141,428
EASTON	6.9%	$125,557
AVON	6.5%	$90,934
NEWTOWN	6.8%	$90,193
MADISON	6.8%	$87,497
MONROE	6.2%	$85,000
BURLINGTON	5.6%	$82,711
BROOKFIELD	6.1%	$82,706
GRANBY	6.2%	$81,151
KILLINGWORTH	5.8%	$80,805
GLASTONBURY	6.7%	$80,660
CHESHIRE	6.1%	$80,466
MARLBOROUGH	6.1%	$80,265
TRUMBULL	6.8%	$79,507

[4]

With the largest tax that most people pay being levied at the local level, municipal boundaries divide responsibility for paying for many public-sector services. Often, people benefit from public services provided in municipalities where they work or visit, but do not have to pay for these services because they do not live in that municipality. Then there is the fact that the greatest social needs tend to appear in a completely different set of municipalities than the municipalities where those of the greatest means live. The net result is a shifting of tax burden down the income scale, from people who can well afford to pay and onto people who cannot.

The Plan for Reform That I Wrote.

I've been working since I was first elected to the legislature in favor of property tax reform. Since there were no comprehensive plans for property tax reform, I took on the task of writing a plan for comprehensive reform. I am happy that there are a number of ideas being considered, now, for property tax reform, and I look forward to voting to approve real change. But, here's a summary of the original plan I wrote.

My original plan, would reduce the property taxes owed in about 75% of the households in the state by cutting people’s property taxes by three quarters of the difference between their state income tax liability and their property tax bill.

Perhaps three out of every four of Connecticut's households pay more in property taxes than they do in State income taxes. This proposal would provide much-needed property tax relief by limiting residents’ property taxes to an amount tied to their State income tax liability.

Here's how it works:

1. 
   
   If you pay more in property taxes (on your primary residence and up to two motor vehicles) than you do in State income taxes, then you are eligible.
2. 
   
   If eligible, calculate the difference between your household property tax bill and your household's State income tax liability.
3. 
   
   Three quarters of the difference becomes a credit that you then subtract from your property tax bill.

Here are two examples of how it works:

1. 
   
   A family with a (pre-credit) property tax bill of $5000, who paid $3000 in State income taxes, would get a $1500 credit ($5000-$3000=$2000 and ¾ of $2000 = $1500). The $1500 credit would reduce their property taxes to $3500.
2. 
   
   A senior citizen who would otherwise pay $5000 in property taxes, but who owed no State income taxes, would get a $3750 credit, and would pay only $1250 in property taxes.

An upper-income statewide municipal tax of just 3.95% should be sufficient to pay for this reform plan. Only the richest 1% in our state would pay this – married couples with incomes over $500,000, heads of household over $396,000 and individuals over $265,750.

It is clear that something must to reform Connecticut's unfair property tax system. Whether it is the reform plan I wrote or some other strategy, I will continue to work until property tax reform is passed.

---

Data from a combination of:

• Who Pays?: A Distributional Analysis of the Tax Systems in All 50 States, 2^nd Edition, the Institute on Taxation and Economic Policy, (ITEP, 2003)
• Department of Revenue Services
• “Median Income for 4-Person Families, by State”, U.S. Census Bureau.
• Municipal Fiscal Indicators, Office of Policy and Management
• Kids Count Data Book 2004, Annie E. Casey Foundation; and the 2000 U.S. Census, U.S. Bureau.

Legislation to help with gasoline and oil prices.

Years of federal policy that has allowed the big oil corporations and Wall Street traders to profit at the expense of the family budgets of ordinary Americans are coming to fruition with the unjust and massive increases in gasoline and oil prices we are experiencing. We need reforms in federal policies to reign in the excesses of Wall Street and the big oil corporations in order to bring prices down.

Even though the causes of this crisis are a federal issue, I wanted to take action to help people. That is why I voted to approve Public Act 08-2.

This legislation does several things. It stops major oil companies from using their franchise agreements to block local gas stations from offering to customers who pay in cash, rather than credit. The Attorney General says these discounts could save people 10 to 12 cents per gallon. This legislation also cancels the half percent increase to the gross receipts tax paid by oil companies that was scheduled to take effect July 1st.

In addition to rising gasoline prices, heating oil costs are going up. This raises the concern that people will have trouble paying for heating oil next Winter. That is why this legislation also authorizes the immediate release of $2.5 million from the Oil Conservation Fund, which can be used for the purchase of new, energy efficient boilers.

Hopefully, legislation under consideration at the federal level to reign in speculators on Wall Street who are driving up oil prices. But, either way, I hope that the legislation we approved here in Connecticut offers some relief.

Raising the Minimum Wage.

Gasoline prices are not the only things rising right now - food and many other necessities of life are becoming more expensive, as well. Most people are struggling to make ends meeting right now. But for working people whose incomes are not large to begin with, it can be crushing.

That is why raising the minimum wage is so important.

This is why I voted with most other legislators to approve House Bill 5105. This legislation raised the minimum wage twice: once by 35 cents, to $8/hour on January 1, 2009 and a second time a year later, on January 1, 2010, by another 24 cents.

Even these increases are very small. They are not even enough to keep a worker at minimum wage up with the rising cost of living, as measured by the inflation rate. This is especially true since, because there was no raise in the minimum wage in 2008, it will have been two years since the minimum was increased.

That is why I was so surprised that the Governor vetoed HB5105. I strongly disagreed with her decision, it is very clear to me that her reasons have little or no merit.

Even though prices have been going up dramatically, the last increase in the minimum wage was a year and half ago. That is why I voted in the legislature to approve to raise the minimum wage. 08-92

Fortunately, the legislature came back again in special session and voted to override the Governor's veto, making HB5105 law - Public Act 08-92.

Even after these increases, the minimum wage is not nearly high enough to allow workers to provide for themselves or their families. That was all the more reason why we could not allow the rising cost of living to cut even further into the family budget of people who are struggling to work for a living.

More information on the mortgage assistance legislation approved this year.

Here is some information, sent to legislators by the Connecticut Housing Finance Authority (CHFA), with some of the details of Public Act 08-176, "An Act Concerning Responsible Lending and Economic Security". I hope this information is helpful:

Summary of P.A. 08-176

“An Act Concerning Responsible Lending and Economic Security”

Emergency Mortgage Assistance Program (EMAP),

Homeowner’s Equity Recovery Opportunity (HERO) Loan Program,

Foreclosure Mediation and CT FAMLIES Program

P.A. 08 -176 “An Act Concerning Responsible Lending and Economic Security” takes effect on July 1, 2008 and includes several components relative to homeowners who are delinquent and/or facing foreclosure.

Emergency Mortgage Assistance Program (EMAP)
The Emergency Mortgage Assistance Program is available to provide emergency mortgage assistance payments to eligible homeowners. Funding in the amount of $64 million has been provided for EMAP and will be administered by Connecticut Housing Finance Authority (CHFA).

• All lenders are required by law to take specific actions prior to commencing a judgment of strict foreclosure or foreclosure by sale for one-to-four family, owner-occupied residential real property located in the State of Connecticut, including condominiums.
• Lenders who start a foreclosure process upon a borrower, are required to give written notice to the borrower by registered or certified mail indicating that the borrower has 60 days from the date of the notice to confer with the lender or have a face-to-face meeting with a consumer credit counseling agency to attempt to resolve the delinquency or default. (A list of CHFA-approved counseling agencies is attached for your reference.)
• In the notice, the lender must also inform the borrower that the EMAP Program is being administered by Connecticut Housing Finance Authority (CHFA). If the lender and borrower are unable to resolve the delinquency or default, the borrower will have 60 days from receipt of the written notice to obtain information and apply for the EMAP Program.
• EMAP is not available to borrowers who have FHA-insured loans.
• Homeowners may contact the CHFA Special Programs Call Center located at 999 West Street, Rocky Hill, CT 06067 via telephone 8:30 a.m. to 5:00 p.m. – local calls 860-571-3500 or toll free 877- 571-CHFA (2432) or via e-mail at EMAPinfo@chfa.org
  

WorkPlace, Inc., in conjunction with other regional workforce development boards, will establish a mortgage crisis job training program for eligible borrowers if they are at least 60 days delinquent on their mortgage, are referred by the CHFA lender or demonstrate an imminent need to increase earnings in order to avoid delinquency or foreclosure.

Homeowner’s Equity Recovery Opportunity (HERO) Loan Program

The purpose of the HERO Program is to permit CHFA to purchase eligible mortgages directly from lenders and place those borrowers on an affordable repayment plan. Funding in the amount of $30 million will be available for this program. There are several options currently being developed. Anyone with questions may contact the CHFA Special Programs Call Center located at 999 West Street, Rocky Hill, CT 06067 via telephone 8:30 a.m. to 5:00 p.m. – local calls 860-571-3500 or toll free 877- 571-CHFA (2432) or via e-mail at HEROinfo@chfa.org.

Foreclosure Mediation
All lenders are required by law to attach to the front of the complaint that is served on the borrower a copy of the “Notice to Homeowner: Availability of Foreclosure Mediation” form and a “Foreclosure Mediation Request” form. In the mediation process, EMAP, HERO and the CT FAMLIES Programs will also be discussed with the borrower as alternatives to saving the borrower’s home from foreclosure. Inquires regarding Foreclosure Mediation may be directed to Roberta Palmer, Superior Court Operations at (860) 363-2734 or via e-mail at: roberta.palmer@jud.ct.gov.

CT FAMLIES Program

CHFA continues to offer the Connecticut Fair Alternative Mortgage Lending Initiative and Education Services (CT FAMLIES) Program, a refinancing mortgage loan that is at a fixed rate for a term of 30 years. Eligible homeowners who have an Adjustable Rate Mortgage (ARM) or their current mortgage is no longer suitable for their financial situation may qualify for a CT FAMLIES Loan. Homeowners may contact the CHFA Special Programs Call Center located at 999 West Street, Rocky Hill, CT 06067 via telephone 8:30 a.m. to 5:00 p.m. – local calls 860-571-3500 or toll free 877- 571-CHFA (2432) or via e-mail at CTFAMLIES@chfa.org.

CONNECTICUT HOUSING FINANCE AUTHORITY

EMAP COUNSELOR LISTING

AGENCY INFORMATION

Co-opportunity, Inc. 20-28 Sargeant Street Hartford, CT 06105 (860)236-3617 (860)808-1757

Housing Education Resource Center 901 Wethersfield Avenue Hartford, CT 06114 (860) 296-4242 (860) 296-1317

Neighborhood Housing Services of New Britain 223 Broad Street New Britain, CT 06053 (860) 224-2433 (860) 225-6131

Urban League of Greater Hartford 140 Woodland Street Hartford, CT 06132 (860) 527-0147 (860) 293-2621

Energy assistance and efficiency legislation.

As I meet the people I represent, many tell me about the difficulty that they have making ends meet because of the shock that is caused by the rise in energy costs. With winter coming, many people are really worried, and I have been advocating for action to help people.  I have been pleased that there is a broad bipartisan agreement between legislators and the Governor about the need for action. The legislature came into session this summer to approve energy assistance legislation.

In addition to the need to increase the amount of the assistance for people who are currently eligible for energy assistance (because fuel prices have increased), the rising costs of oil and other energy has created a problem for people whose incomes are over the current limits that needs to be addressed.  The legislature approved two items to items in order to address these issues.  The first, SB1101, does a few important things to help with this.  It provides:

• $4 million to assist people state residents 65 or older with incomes up to $48,787 for a single person or $63,789 for a couple. This home heating assistance includes deliverable fuel, electricity and natural gas.
• $8.5 million to Operation Fuel for assistance to households with incomes between $15,600 for a single person and up to $42,400 for a family of four. This home heating assistance also includes deliverable fuel, electricity and natural gas.
• $5 million to expand Operation Fuel’s assistance to households greater than 200% of the federal poverty level but equal to or less than 100% of the state median household income – this home heating assistance includes deliverable fuel, electricity and natural gas

SB1101 also:

• Helps our local schools by allocating $6.5 million for our local school districts to heat school buildings
• Lowers the minimum delivery from 150 gallons to 100 gallons
• Ensures that companies have the resources to honor prepaid contracts
  
  

The other legislation that was approved (SB1102) is meant to raise the amount of money available for people who are currently eligible for energy assistance by adding up to $35 million into an energy contingency account to:

• Provide emergency home heating assistance
  
• Supplement federal funding to the Connecticut Energy Assistance Program (CEAP)
  

And it does a number of important things to increase energy efficiency and save people money by allocating:

• $3 million added to the furnace or boiler replacement program
  
• $2 million to provide eligible state residents to repair or upgrade their existing boilers or furnaces to make them more efficient
  
• 0% loans through the Energy Conservation Loan Program to replace existing furnaces and boilers with more efficient ones
  
• $2 million to DECD for additional funding to their loan program for insulation, alternative energy devices, energy conservation materials and replacement furnaces and boilers
  
• $7 million to subsidize the cost of an energy audit to households that heat by means other than natural gas or electricity (currently the program is free to those households but cost $300 to all other households)
  
• $2 million to DSS to provide funding for weatherization programs to households in the CEAP program
  

And it also allocates:

• $3.5 million for heating assistance grants to non profit organizations that are human service or public health providers
  

I hope that this legislation goes a long way to help people this winter and increase our energy efficiency for the long run.

Rising prescription costs - with a lot spent on advertising.

There was an informational hearing recently in the legislature's Public Health Committee on the effect of marketing on the prices of medications. Drug prices have been growing over time, so it is important to understand why.

What is astonishing, as you can see in the slide presentation below, is just how much we pay for drugs goes to pay for advertising and marketing.



This report says that 32.8% of the price of medications we pay for goes to advertising, marketing and general administration. The report says that, by comparison only 14% of what we pay goes to drug research and development and 25.3% goes to the actual manufacturing of the medications.

Most of us have seen all of those expensive, polished television commercials promoting different drugs. It looks like we are paying, and paying a lot, for those commercials when we buy our medications.

This information is from the Prescription Project (www.prescriptionproject.org).