Contact: Lawrence Cook
March 3, 2010
State Senator Gary D. LeBeau (D-East Hartford) said today that following a Wednesday morning meeting with OPM Secretary Ben Barnes and a dozen other legislators, he is hopeful that the Malloy administration will reconsider its plan to cut tens of millions of dollars in state aid to cities and towns under Connecticut’s manufacturing machinery and equipment (MME) tax exemption program
Sen. LeBeau—who is Senate chairman of the Commerce Committee and who helped write and pass the MME law—said Secretary Barnes “made a commitment to continue working on it and to fix the problem.” Sen. LeBeau added that “the legislature has to be a part of that solution.”
As part of his 2011-2012 biennial budget plan, Gov. Malloy is proposing to cut $44.2 million in state MME aid in 2011 alone. According to OPM projections, Sen. LeBeau’s hometown of East Hartford would lose $3.6 million in state MME aid in 2011, the largest loss of any town in Connecticut.
Other affected municipalities and their potential lost MME aid include: Stratford ($2.8 million); Bristol ($2 million); Bloomfield ($1.4 million); Middletown ($1.6 million); Windsor Locks ($1.5 million); Waterbury ($2 million); New Britain ($1.2 million); South Windsor ($1 million); Wallingford ($1.6 million); and Windsor ($1 million).
Connecticut’s MME program provides for 100 percent exemption of local property taxes on qualified, newly acquired manufacturing machinery and equipment. In 2008, Connecticut gave 209 cities and towns $42 million to offset the property taxes they are prohibited from imposing on more than 4,000 state manufacturers.
Sen. LeBeau said while he appreciates Gov. Malloy’s desire to mitigate town revenue losses by offering alternatives such as boat and aircraft taxes, a local retail sales tax, room occupancy and real estate conveyance taxes, that formula creates distinct ‘winners and losers’ which exacerbates some communities’ ability to pay.
“There are 23 towns that would see a net revenue loss under this formula while everyone else benefits. That is disproportionate,” Sen LeBeau said. “I would say to those towns that are scheduled to see a gain, do not count your chickens before they hatch.”
Member: Legislative Management
Hartford, CT 06106-1591
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