Quote:
"This is pinching the folks severely who are in the lowest income tax bracket, and we don't want that." says Greenwich senator William Nickerson
Editorial:
County Fair: Take a Penny
Fairfield County Weekly
Looking for a way to bring additional money to their municipalities, local mayors are asking state legislators to allow them to levy a city sales tax in order to fatten up their fiscal budgets.
House Bill 5929, also known to as the "Penny Tax," was introduced by the finance committee last month and could give municipalities the choice to impose an additional local tax either on sales, property or income; Fairfield County politicians are only supporting an additional sales tax. One proposal would limit the local sales tax to one cent while another left the amount open ended. That tax, separated from what residents already pay, would go strictly towards each town or city.
Mayors Dannel Malloy of Stamford and Bill Finch of Bridgeport agree an additional sales tax is needed to boost their budgets. "I know that people don't want to see sales tax go up, but they don't want to see their property tax go up either," says Malloy.
Finch admits that putting an additional sales tax on residents is "a bad choice," but it's "far less bad" than cutting essential services and raising property taxes. "What we want is to give some power to the city," says Finch. "Basically, we want legislators to allow municipalities to construct a sales tax that would stay here."
If Bridgeport was given the green light to create an additional one-cent sales tax, Finch calculates the city would receive about $8.2 million in additional revenue annually. In Stamford's case it could generate $19 to $20 million, Malloy says.
But if a city had an extra sales tax, wouldn't it send shoppers to neighboring areas? "We don't think that is a fair assumption to make," says Finch. Although exact items to be taxed have yet to be determined, Finch says, they would likely be "items of convenience" that shoppers tend to buy in their own neighborhoods.
The ball is in the court of the State Senate Finance Committee, where Greenwich senator William Nickerson is the ranking Republican. Nickerson says the bill is "floating around" and a decision could be expected this week. He warns the proposal could "create a conflict of war" between neighboring municipalities looking to attract developers.
"What the developer will do, if this were to go through, is decide to locate their facility where there is no [additional] tax in order to attract residents from other towns that do have this tax." Nickerson also feels it could hurt those who are already living paycheck to paycheck. "This is pinching the folks severely who are in the lowest income tax bracket, and we don't want that."
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