Month: April 2015

Fonfara Leads Finance Committee in Approving Major Overhaul to the Way Connecticut Funds Cities and Towns

Senate Bill 1 Provides: Property Tax Relief, Car Tax & PILOT Reform, Municipal Aid Increases, New Revenue for Towns, Regional Planning

The General Assembly’s Finance, Revenue and Bonding Committee today approved Senate Bill 1 which fundamentally reforms the way the state funds cities and towns, reforms the Payment in Lieu of Taxes (PILOT) program, provides property tax relief for Connecticut’s families, fixes the state’s broken car tax system, delivers new revenue for towns and promotes regional planning efforts.

“These reforms will bring stability and sustainability to our state and our municipalities,” said Senator John Fonfara (D-Hartford), Senate Chair of the Finance, Revenue and Bonding Committee. “Connecticut deserves a progressive and equitable tax structure that keeps our cities and towns whole and enables us to plan responsibly for the future.”

“This bill will result in quantifiable tax relief for Connecticut’s families and small businesses,” said Senate President Martin M. Looney (D-New Haven). “Senate Bill 1 represents the largest overhaul of our property tax, car tax and Payment in Lieu of Taxes systems in our history. It provides new revenues to cities and towns while at the same time slowing municipal property tax growth. Finally, it facilitates regional economic development planning instead of pitting towns against each other.”

PILOT Reform & Property Tax Relief

• Some towns face a much greater burden due to tax exempt property—they must tax their remaining property at higher levels, a real burden on families and businesses.
• PILOT reform: for the first time, as result of this bill, Connecticut will provide a greater level of PILOT aid to towns with the highest levels of state mandated tax exempt property.
• Preserving PILOT for all towns: All towns will be held harmless at FY 15 levels through FY 16 and beyond. In FY 17, additional aid kicks in for towns most in need.

Car Tax Reform

• The car tax is the most unfair, regressive tax in Connecticut today. Taxpayers in Hartford pay more than six times the tax as a Greenwich resident on an identical car. This is wrong.
• This bill establishes a permanent cap on the car tax in all towns at 29.36 mills.
• This measure will cut property tax bills in half for taxpayers with the highest mill rates.
  • Taxpayers in more than 70 towns will receive a direct tax cut.
  • No municipality will see a revenue loss due to this cap, due to a combination of increased PILOT aid and new local revenues.

A Long-awaited, New Source of Revenue for Towns

• SB 1 provides municipalities with a revenue source other than the property tax.
• 0.5 percent of the state sales tax will be dedicated exclusively to municipalities and regions (Councils of Government or COGs) beginning October 1, 2015.
  • 90 percent of the resulting revenue will be distributed directly to towns
  • 10 percent of the revenue will be distributed to the COGs to support regional services and efficiencies
• Slowing property tax growth—to ensure these new revenues are spent responsibly, and to slow the growth of high property tax rates, SB 1 introduces a new “soft cap” on municipal spending
  • If towns increase spending by more than 2.5 percent or the rate of inflation (whichever is greater), their sales tax revenues will be reduced accordingly

Promoting Efficient Regional Planning

• SB 1 establishes a voluntary revenue sharing option for COGs, to allow member towns to share up to 20 percent of property tax revenues on new commercial and industrial development
  • This provision will facilitate improved regional planning, and coordination rather than divisive competition among towns for development and economic growth

Fonfara: Top Accounting and Consulting Firm Growing Jobs in Hartford

Investment will strengthen state’s professional services workforce infrastructure

State Senator John Fonfara (D- Hartford) and Governor Dannel P. Malloy today announced that CohnReznick LLP is expanding its presence in Connecticut in a move that will create or retain 236 jobs for Connecticut residents over the next four years.

“The consolidation of three CohnReznick locations into one downtown Hartford site is yet another example of Governor Malloy’s laser-like focus to grow our state’s economy and, when possible, to help our cities at the same time. An announcement such as this doesn’t happen without the hard work of Governor Malloy and his team and their determination to let all employers know that Connecticut means business,” said State Senator John Fonfara (D-Hartford, Wethersfield).

“CohnReznick is a nationally recognized accounting and consulting firm and a leader in the professional services sector, which accounts for more than ninety thousand good paying jobs in Connecticut,” said Governor Malloy. “CohnReznick’s decision to expand here means more of these jobs for our residents. It’s a major investment in this critical industry, one that will encourage other employers to follow suit.”

The state Department of Economic and Community Development (DECD) will provide CohnReznick with a $1.2 million loan at an interest rate of 2 percent for a term of 10 years. Principal payments will be deferred for the first five years. The company may receive a loan principal forgiveness credit of $600,000 if it meets its commitment to retain its 196-person workforce and create 40 new fulltime jobs within four years.

“CohnReznick is excited to be working with the State of Connecticut as we expand our business in Hartford. Consolidating the staff from our Farmington and Glastonbury offices has been our goal for some time,” said Frank Longobardi, CPA, Regional Managing Partner—New England. “The funding from the State will assist us in the renovations of the Metro Center site, creating workspaces that will allow for greater collaboration and efficiencies among our staff and afford us space to create new jobs in Hartford. We are looking forward to our move to the Capital City and hope to be a beacon for future growth in Hartford.”

Including DECD funding, CohnReznick’s total project investment is $4.5 million to refurbish space, make leasehold improvements and purchase office furniture, fixtures and equipment. The firm will merge two existing office locations from Glastonbury and Farmington into one located at 350 Church Street in Hartford. CohnReznick is also considering relocating employees from its other New England offices to Hartford.

“This is an encouraging sign for the City of Hartford and the State of Connecticut,” said State Rep. Douglas McCrory (D-Hartford). “We need companies like CohnReznick to make investments in the city with long-term job creation and hiring plans that will actually benefit residents.”

With origins dating back to 1919, CohnReznick is the 11th largest accounting, tax, and advisory firm in the U.S. Headquartered in New York City, the firm serves a large number of diverse industries and offers specialized services for Fortune 1000 companies, owner-managed businesses, international enterprises, government agencies, not-for-profit organizations, and other key market sectors. The firm has more than 280 partners, 2,200 employees and 26 offices, and is a member of Nexia International, a global network of independent accountancy, tax, and business advisors.

“This is another example of a dynamic, growing firm choosing to grow in Connecticut,” said DECD Commissioner Catherine Smith. “Connecticut has the financial and professional talent that top firms need, and DECD is happy to support CohnReznick’s continued growth and success.”

Last year, Connecticut employment in the professional services sector was 90,133. The output of this industry is $16.5 billion, or 7.2 percent of Connecticut’s statewide GSP.