Thursday, September 17, 2009
Former Gen Re Senior Vice President Sentenced
Nora R. Dannehy, United States Attorney for the District of Connecticut, and Dana J. Boente, United States Attorney for the Eastern District of Virginia, announced that Richard Napier, 58, of Wilton, Conn., was sentenced today by United States District Judge Christopher F. Droney in Hartford, Conn., to two years of probation for his role in a fraudulent scheme to manipulate AIG's financial statements. Napier also was ordered to pay a fine in the amount of $10,000 and to perform 400 hours of community service. On June 10, 2005, Napier pleaded guilty to one count of conspiring to commit securities fraud.
Tuesday, June 9, 2009
Ricci v. DeStefano
Plaintiffs argue that defendants’ decision and/or advocacy against certifying the exam results amounted to intentional discrimination against plaintiffs, 17 of whom are white and one of whom is Hispanic, in favor of Hispanic and African-American examinees who were favored due to their race and their alleged political support of Mayor DeStefano, via the Rev. Boise Kimber. Plaintiffs essentially argue that defendants’ professed desire to comply with Title VII’s anti-disparate-impact requirements was in fact a pretext for intentional discrimination against white candidates. …
Defendants proffer as their legitimate non-discriminatory reason that they desired to comply with the letter and the spirit of Title VII. Plaintiffs deride this “feigned desire to ‘comply’ with Title VII,” arguing that defendants in fact violated that statute, and their actions were a mere pretext for promoting the interests of African-American firefighters and political supporters of the mayor.
As plaintiffs point out, this case presents the opposite scenario of the usual challenge to an employment or promotional examination, as plaintiffs attack not the use of allegedly racially discriminatory exam results, but defendants’ reason for their refusal to use the results…
Plaintiffs do not dispute that the results showed a racially adverse impact on African- American candidates for both the Lieutenant and Captain positions, as judged by the EEOC Guidelines.
Thus, it is necessarily undisputed that, had minority firefighters challenged the results of the examinations, the City would have been in a position of defending tests that, under applicable Guidelines, presumptively had a disparate racial impact.
Specifically, the EEOC “four-fifths rule” provides that a selection tool that yields “[a] selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5) (or eighty percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact, while a greater than four-fifths rate will generally not be regarded by Federal enforcement agencies as evidence of adverse impact.”
Here, the evidence shows that on the 2003 Lieutenant’s exam the pass rate for whites was 60.5%, for African-Americans 31.6% and Hispanics 20%. The four-fifths score would be 48%….
…The EEOC’s Uniform Guidelines for Employee Selection Procedures create a presumption that “[t]he use of any selection procedure which has an adverse impact on the hiring, promotion, or other employment or membership opportunities of members of any race, sex, or ethnic group will be considered to be discriminatory and inconsistent with these guidelines, unless the procedure has been validated in accordance with these guidelines.”
The real crux of plaintiffs’ argument is that defendants refused to explore alternatives or conduct a validity study because they had already decided that they did not like the inevitable promotional results if the process continued to its expected conclusion and that their “diversity” rationale is prohibited as reverse discrimination under Title VII. In Hayden v. County of Nassau the Second Circuit held that race-conscious configuration of an entry-level police department exam did not violate Title VII or the Equal Protection Clause. In that case, the Nassau County Police Department was operating under several consent decrees prohibiting it from engaging in discrimination in its selection of police officers, and particularly from utilizing examinations with disparate impact on minority applicants. Following development of a test by the county and Department of Justice advisors, a validity analysis was conducted to determine which configuration of the test was sufficiently job-related “yet minimized the adverse impact on minority applicants. Of the twenty-five sections administered to the applicants, the [technical report] recommended that Nassau County use nine sections as the . . . test.” A class of White and Latino officers challenged use of the adjusted test under Title VII and the Fourteenth Amendment, inter alia, contending that the deliberate design of the test to reduce adverse impact on African-American candidates necessarily discriminated against them on the basis of race. The Court of Appeals rejected the plaintiffs’ contentions, finding plaintiffs were “mistaken in treating racial motive as a synonym for a constitutional violation” and observing that “[e]very antidiscrimination statute aimed at racial discrimination, and every enforcement measure taken under such a statute, reflect a concern with race. That does not make such enactments or actions unlawful or automatically suspect . . .”
The Hayden court further held that the construction of the Nassau County test for the purpose of minimizing adverse impact on minorities was not intentional “reverse discrimination” against whites because the same nine test sections were used for all applicants, so it was “simply not analogous to a quota system or a minority set-aside where candidates, on the basis of their race, are not treated uniformly.” Rejecting plaintiffs’ argument that the design of the test reflected impermissible discriminatory intent, the Second Circuit wrote that “nothing in our jurisprudence precludes the use of raceneutral means to improve racial and gender representation. . . . [T]he intent to remedy the disparate impact of the prior exams is not equivalent to an intent to discriminate against non-minority applicants.”
In Kirkland v. New York State Department of Correctional Services,, the Court of Appeals affirmed the district court’s approval of a settlement that determined promotional order based partly on exam results and partly on race-normed adjustments to the exam, after minority employees made a prima facie showing that the test had an adverse impact on minorities. The Court of Appeals noted that “voluntary compliance is a preferred means of achieving Title VII’s goal of eliminating employment discrimination,”, and that requiring a full hearing on the test’s job-validity before approving a settlement “would seriously undermine Title VII’s preference for voluntary compliance and is not warranted,” id. at 1130. Thus, “a showing of a prima facie case of employment discrimination through a statistical demonstration of disproportionate racial impact constitutes a sufficiently serious claim of discrimination to serve as a predicate for a voluntary compromise containing race-conscious remedies.”
The Second Circuit expanded Kirkland in Bushey v. New York State Civil Service Commission, There, the civil service commission had administered a promotional examination that had a significant adverse impact, with non-minority applicants passing at almost twice the rate of minority applicants. The defendants race-normed the scores for each group, increasing the pass rate of the minority group to the equivalent of the non-minority group, and effectively making an additional 8 minority individuals eligible for promotion, without taking any non-minorities off the list. The Court of Appeals held that the initial results, particularly “the score distributions of minority and nonminority candidates, were sufficient to establish a prima facie showing of adverse impact,” and, consistent with Kirkland, “a showing of a prima facie case of employment discrimination through a statistical demonstration of disproportional racial impact constitutes a sufficiently serious claim of discrimination to serve as a predicate for employer-initiated, voluntary race-conscious remedies,”. In other words, a prima facie case is one way that a race-conscious remedy is justified, but it is not required: all that is required is “a sufficiently serious claim of discrimination” to warrant such a remedy. Id. at 228; see 9Plaintiffs denigrate reliance on Kirkland and Bushey on the grounds that the “race-norming” procedures utilized in those cases would be unlawful under the 1991 amendments to the Civil Rights Act. See 42 U.S.C. § 2000e-2(l) (“It shall be an unlawful employment practice for a respondent, in connection with the selection or referral of applicants or candidates for employment or promotion, to adjust the scores of, use different cutoff scores for, or otherwise alter the results of, employment related tests on the basis of race, color, religion, sex, or national origin.”)….
In this case, the parties agree that the adverse impact ratios for African-American and Hispanic test-takers on both the Lieutenant and Captain exams were too low to pass muster under the EEOC’s “four-fifths rule.” As Kirkland and Bushey held, a statistical showing of discrimination, and particularly a pass rate below the “four-fifths rule,” is sufficient to make out a prima facie case of discrimination, and therefore sufficient to justify voluntary race-conscious remedies.9 Here, defendants’ remedy is “race conscious” at most because their actions reflected their intent not to implement a promotional process based on testing results that had an adverse impact on African- Americans and Hispanics. The remedy chosen here was decidedly less “race conscious” than the remedies in Kirkland and Bushey,.because New Haven did not race-norm the scores, they simply decided to start over, to develop some new assessment mechanism with less disparate impact. Thus, while the evidence shows that race was taken into account in the decision not to certify the test results, the result was race-neutral: all the test results were discarded, no one was promoted, and firefighters of every race will have to participate in another selection process to be considered for promotion. Indeed, there is a total absence of any evidence of discriminatory animus towards plaintiffs – under the reasoning of Hayden… “nothing in our jurisprudence precludes the use of race-neutral means to improve racial and gender representation. . . . [T]he intent to remedy the disparate impact of the prior exams is not equivalent to an intent to discriminate against non-minority applicants.”
Plaintiffs contend that Hayden is distinguishable by the fact that the remedy approved there was pursuant to previous consent decrees; they do not explain why they view this distinction as significant. As Bushey held, it would contravene the remedial purpose of Title VII if an employer were required to await a lawsuit before voluntarily implementing measures with less discriminatory impact…
Thus, while the facts of Hayden were slightly different than those here, the Court finds the holding quite relevant and instructive. Defendants’ motivation to avoid making promotions based on a test with a racially disparate impact, even in a political context, does not, as a matter of law, constitute discriminatory intent, and therefore such evidence is insufficient for plaintiffs to prevail on their Title VII claim. Accordingly, the Court will grant defendants’ motion and deny plaintiffs’ motion for summary judgment on this claim.
Tuesday, May 5, 2009
Budget Cuts Threaten Health and Education Sector
HEALTH AND EDUCATION JOBS ARE BRIGHT SPOTS
DURING CONNECTICUT’S RECESSION
A new report on job and unemployment trends during Connecticut’s economic recession finds that the Health and Education job sector is the only area of the economy showing significant growth since the recession began in December 2007. The report by Connecticut Voices for Children, a research-based policy thinktank, finds that the combined Health and Education sector (the state’s largest sector) added 9,700 jobs (3.7% growth) from December 2007 to March 2009, while nearly all other major job sectors declined.
Connecticut Voices for Children warned that since the Health and Education sector relies on public sector investment, major state budget cuts to health and education programs could undermine the only significant area of growth in the state’s economy and weaken Connecticut’s competitive advantage – its well-educated workforce.
“The Governor and state legislators should be doing everything they can to maximize growth in the largest and fastest growing area of our economy,” said Douglas Hall, Acting Managing Director of Connecticut Voices for Children. “Taking a more balanced approach between budget cuts and revenue increases will help to protect our economy and speed our recovery. Severe cuts to health and education would be an ‘anti-stimulus package’.”
Because of Connecticut’s state revenue shortfall, Governor Rell and state legislators are considering a variety of budget cuts, including cuts that would cause strains on employers in the Education and Health sector:
· Cuts in funds for nursing homes, HUSKY health insurance, dental coverage for adults in Medicaid, Community Health Services, and School-Based Health Centers.
· Cuts in funding for magnet schools, charter schools, priority school districts, school readiness preschool programs, and child care quality improvement initiatives.
Using a model from the national Center for Economic and Policy Research, Connecticut Voices estimates that Governor Rell’s total recommended budget cuts to all state programs ($1.075 billion) in the next fiscal year (FY 2010) could result in a loss of approximately 14,700 jobs.
The budget submitted by the General Assembly’s Appropriations Committee also includes several cuts to health and education that could potentially cost the state jobs, but many of the cuts in the Governor’s budget, particularly health cuts, are reduced or eliminated. The General Assembly is able to avoid several budget reductions by taking a more balanced approach to the state budget, relying upon both cuts and increased revenue to close the budget gap.
“These budget cuts would mean fewer jobs, less access to education, and fewer dollars circulating in the local economy,” said Joachim Hero, Research Fellow at Connecticut Voices for Children and author of the report. “With household costs rising and jobs shrinking, the state must also do more, not less, to help families make ends meet and rebuild the economy.”
The report, “Connecticut’s Economy in Recession: Trends in Employment and Unemployment,” is based on data from the national Bureau of Labor Statistics, and also found:
· The 3.4% job loss in the current recession is more than three times the 1.1% job loss during the first year of the previous recession.
· The largest job losses were in Professional and Business Services (-16,100); Construction (-15,900); Trade, Transportation, and Utilities (-13,300); and Manufacturing (-12,400).
· Of the 9,700 jobs gained in the Health and Education sector, 8,000 were in Health Care and Social Assistance (including health, social work, family services, and child care) and 1,700 were in Education.
· Connecticut’s unemployment rate of 7.5% is the highest it has been since 1992.
To help avoid state budget cuts and raise the revenues the state needs, Connecticut Voices for Children recommends a variety of revenue proposals, including a more progressive income tax, closing corporate tax loopholes that enable corporations to shift their profits to out-of-state subsidiaries, and scaling back state subsidies to the entertainment industry though the “film tax credit.”
Click here for the report.
DURING CONNECTICUT’S RECESSION
A new report on job and unemployment trends during Connecticut’s economic recession finds that the Health and Education job sector is the only area of the economy showing significant growth since the recession began in December 2007. The report by Connecticut Voices for Children, a research-based policy thinktank, finds that the combined Health and Education sector (the state’s largest sector) added 9,700 jobs (3.7% growth) from December 2007 to March 2009, while nearly all other major job sectors declined.
Connecticut Voices for Children warned that since the Health and Education sector relies on public sector investment, major state budget cuts to health and education programs could undermine the only significant area of growth in the state’s economy and weaken Connecticut’s competitive advantage – its well-educated workforce.
“The Governor and state legislators should be doing everything they can to maximize growth in the largest and fastest growing area of our economy,” said Douglas Hall, Acting Managing Director of Connecticut Voices for Children. “Taking a more balanced approach between budget cuts and revenue increases will help to protect our economy and speed our recovery. Severe cuts to health and education would be an ‘anti-stimulus package’.”
Because of Connecticut’s state revenue shortfall, Governor Rell and state legislators are considering a variety of budget cuts, including cuts that would cause strains on employers in the Education and Health sector:
· Cuts in funds for nursing homes, HUSKY health insurance, dental coverage for adults in Medicaid, Community Health Services, and School-Based Health Centers.
· Cuts in funding for magnet schools, charter schools, priority school districts, school readiness preschool programs, and child care quality improvement initiatives.
Using a model from the national Center for Economic and Policy Research, Connecticut Voices estimates that Governor Rell’s total recommended budget cuts to all state programs ($1.075 billion) in the next fiscal year (FY 2010) could result in a loss of approximately 14,700 jobs.
The budget submitted by the General Assembly’s Appropriations Committee also includes several cuts to health and education that could potentially cost the state jobs, but many of the cuts in the Governor’s budget, particularly health cuts, are reduced or eliminated. The General Assembly is able to avoid several budget reductions by taking a more balanced approach to the state budget, relying upon both cuts and increased revenue to close the budget gap.
“These budget cuts would mean fewer jobs, less access to education, and fewer dollars circulating in the local economy,” said Joachim Hero, Research Fellow at Connecticut Voices for Children and author of the report. “With household costs rising and jobs shrinking, the state must also do more, not less, to help families make ends meet and rebuild the economy.”
The report, “Connecticut’s Economy in Recession: Trends in Employment and Unemployment,” is based on data from the national Bureau of Labor Statistics, and also found:
· The 3.4% job loss in the current recession is more than three times the 1.1% job loss during the first year of the previous recession.
· The largest job losses were in Professional and Business Services (-16,100); Construction (-15,900); Trade, Transportation, and Utilities (-13,300); and Manufacturing (-12,400).
· Of the 9,700 jobs gained in the Health and Education sector, 8,000 were in Health Care and Social Assistance (including health, social work, family services, and child care) and 1,700 were in Education.
· Connecticut’s unemployment rate of 7.5% is the highest it has been since 1992.
To help avoid state budget cuts and raise the revenues the state needs, Connecticut Voices for Children recommends a variety of revenue proposals, including a more progressive income tax, closing corporate tax loopholes that enable corporations to shift their profits to out-of-state subsidiaries, and scaling back state subsidies to the entertainment industry though the “film tax credit.”
Click here for the report.
Friday, April 17, 2009
Republicans Will Kill Citizens’ Election Fund?
Yesterday, Connecticut Republican lawmakers released a
budget proposal which proposed eliminating $60 million from the Citizens’
Election Fund, effectively killing the program.
“The League of Women Voters opposes the Republican proposal. In
these tough economic times, we need a Governor and a Legislature that listens
to the people, not the industries that contribute the most money,” said Christine
Horrigan, government director for the League of Women Voters of Connecticut.
“The Citizens Elections program allows candidates to run for office free of
special interest money and we need this critical accountability measure now
more than ever.”
The inaugural year of the Citizens’ Election Program was an unqualified
success. The new law frees candidates from special interest money by allowing
them to participate in a voluntary program for public funds if they raise a
threshold amount of qualifying contributions from individuals in their district.
Once they qualify, candidates agree to abide by spending limits and forgo further
private contributions. In return they receive a grant from the state to run their
campaign, and if they are elected they head to the statehouse accountable
primarily to the voters who elected them, not the special interests who would
have financed their campaign.
Seventy-five percent of all candidates for Connecticut’s General Assembly
ran under the Citizens’ Elections program. Eighty-one percent, or 152 out of 187
of those elected to serve in the next General Assembly ran under the Citizens’
Elections program. In the Connecticut Senate, 89 percent of the seats, or 32 of
36, will be held by Clean Elections officials. On the House side, Clean Elections
officials will hold at least 120 of the 151 seats.
“We can’t go back to the corruption of the past when the name of the
game was pay-to-play,” said Cheri Quickmire, Executive Director of Common
Cause. “It wasn’t that long ago that John Rowland was giving no-bid
government contracts to special interests who gave him large personal gifts and even larger campaign contributions.
“From our perspective, the Citizens Election program has already paid for
itself by making it possible to reclaim the $20 million a year in unclaimed bottle
deposits,” added Cheri Quickmire. “The recent enactment of Connecticut’s new
law requiring five cent deposits on plastic water bottles and reclaiming the
collection of millions of dollars worth of unclaimed bottle deposits is the perfect
example of how the Citizens Election program can impact public policy.”
Environmentalists and others at the Capitol tried to make progress on
these two major issues for years, but the beverage industry and their lobbyists
with their generous campaign contributions kept reform at bay for years. 80%
of this General Assembly ran free of special interest money under the new law
and voted early in the session to pass the expanded bottle bill and to reclaim the
bottle deposit money. It is clear that landmark campaign finance laws passed in
2005 and 2006 have severely diminished the power special interests once
wielded in state government.
“It is no surprise that Representative Larry Cafero and Senator John
McKinney are leading the charge to gut this program,” said Tom Swan,
Executive Director of Connecticut Citizen Action Group. “They never were
supporters of public financing in the first place. This program is the most
significant anti-corruption measure adopted by the state. The Republican
proposal should be summarily rejected by all.”
Groups supporting the Ciizens Election Program In Connecticut include:
ACORN
AFSCME Council 4
American Postal Workers Union,
WestConn Area Local
Capitol Region Council of Churches
Citizens For Economic Opportunity
Citizens For Election Reform
Collaborative Center for Justice
Connecticut AFL-CIO
Connecticut Association of Human Services
Connecticut Citizen Action Group
Connecticut Common Cause
Connecticut Conference of the United Church of Christ
Connecticut Federation ofEducational and Professional Employees
Connecticut Green Party
Connecticut NOW
Connecticut State Employees Association
CCD
Connecticut Women’s Education and Legal Fund
ConnPIRG
Danbury Central Labor Council
Danbury Hospital Professional
Nurses Association, Local 5047
DemocracyWorks
Democracy for CT
Earth Matters
Fairfield County Labor Council
Grassroots Coalition, Inc.
Greater Hartford African American
Alliance
Greater Hartford Labor Council
Hartford Environmental Justice Network
Healthcare For All
NAACP-CT
Northeast Action
One Connecticut
People’s Action for Clean Energy
SEIU
Sierra Club-CT
Toxic Action Center
United Auto Workers-Region 9A
Veterans for Peace, Chapter 18
Western Connecticut Central Labor Council
Yale Students for Clean Elections
Youth for Justice
budget proposal which proposed eliminating $60 million from the Citizens’
Election Fund, effectively killing the program.
“The League of Women Voters opposes the Republican proposal. In
these tough economic times, we need a Governor and a Legislature that listens
to the people, not the industries that contribute the most money,” said Christine
Horrigan, government director for the League of Women Voters of Connecticut.
“The Citizens Elections program allows candidates to run for office free of
special interest money and we need this critical accountability measure now
more than ever.”
The inaugural year of the Citizens’ Election Program was an unqualified
success. The new law frees candidates from special interest money by allowing
them to participate in a voluntary program for public funds if they raise a
threshold amount of qualifying contributions from individuals in their district.
Once they qualify, candidates agree to abide by spending limits and forgo further
private contributions. In return they receive a grant from the state to run their
campaign, and if they are elected they head to the statehouse accountable
primarily to the voters who elected them, not the special interests who would
have financed their campaign.
Seventy-five percent of all candidates for Connecticut’s General Assembly
ran under the Citizens’ Elections program. Eighty-one percent, or 152 out of 187
of those elected to serve in the next General Assembly ran under the Citizens’
Elections program. In the Connecticut Senate, 89 percent of the seats, or 32 of
36, will be held by Clean Elections officials. On the House side, Clean Elections
officials will hold at least 120 of the 151 seats.
“We can’t go back to the corruption of the past when the name of the
game was pay-to-play,” said Cheri Quickmire, Executive Director of Common
Cause. “It wasn’t that long ago that John Rowland was giving no-bid
government contracts to special interests who gave him large personal gifts and even larger campaign contributions.
“From our perspective, the Citizens Election program has already paid for
itself by making it possible to reclaim the $20 million a year in unclaimed bottle
deposits,” added Cheri Quickmire. “The recent enactment of Connecticut’s new
law requiring five cent deposits on plastic water bottles and reclaiming the
collection of millions of dollars worth of unclaimed bottle deposits is the perfect
example of how the Citizens Election program can impact public policy.”
Environmentalists and others at the Capitol tried to make progress on
these two major issues for years, but the beverage industry and their lobbyists
with their generous campaign contributions kept reform at bay for years. 80%
of this General Assembly ran free of special interest money under the new law
and voted early in the session to pass the expanded bottle bill and to reclaim the
bottle deposit money. It is clear that landmark campaign finance laws passed in
2005 and 2006 have severely diminished the power special interests once
wielded in state government.
“It is no surprise that Representative Larry Cafero and Senator John
McKinney are leading the charge to gut this program,” said Tom Swan,
Executive Director of Connecticut Citizen Action Group. “They never were
supporters of public financing in the first place. This program is the most
significant anti-corruption measure adopted by the state. The Republican
proposal should be summarily rejected by all.”
Groups supporting the Ciizens Election Program In Connecticut include:
ACORN
AFSCME Council 4
American Postal Workers Union,
WestConn Area Local
Capitol Region Council of Churches
Citizens For Economic Opportunity
Citizens For Election Reform
Collaborative Center for Justice
Connecticut AFL-CIO
Connecticut Association of Human Services
Connecticut Citizen Action Group
Connecticut Common Cause
Connecticut Conference of the United Church of Christ
Connecticut Federation ofEducational and Professional Employees
Connecticut Green Party
Connecticut NOW
Connecticut State Employees Association
CCD
Connecticut Women’s Education and Legal Fund
ConnPIRG
Danbury Central Labor Council
Danbury Hospital Professional
Nurses Association, Local 5047
DemocracyWorks
Democracy for CT
Earth Matters
Fairfield County Labor Council
Grassroots Coalition, Inc.
Greater Hartford African American
Alliance
Greater Hartford Labor Council
Hartford Environmental Justice Network
Healthcare For All
NAACP-CT
Northeast Action
One Connecticut
People’s Action for Clean Energy
SEIU
Sierra Club-CT
Toxic Action Center
United Auto Workers-Region 9A
Veterans for Peace, Chapter 18
Western Connecticut Central Labor Council
Yale Students for Clean Elections
Youth for Justice
Wednesday, April 15, 2009
State Revenue Solutions for Connecticut
Connecticut’s revenue system is failing to provide the funds we need to support the public structures that help maintain our quality of life – our schools, transportation systems, environmental protection agencies, and public safety agencies. The state’s revenue shortfall is serious, but manageable. Connecticut can adopt a more fair, reliable and accountable revenue plan by:
Increasing income taxes for those who can best afford it (increased revenues: $0.8 to 1.2 billion). Connecticut’s wealthiest families pay 4.7% of their income in state and local taxes (after federal tax deductions for state and local taxes).
By comparison, middle-income families pay 10.2% and low-income families pay 10.9% of their income in state and local taxes. Increasing income taxes for the wealthiest residents will help to make our tax system more fair and to close the state revenue gap. Adopting higher income tax brackets for married couple families over $200,000, as recommended by the Better Choices for Connecticut coalition, would raise an estimated $1 billion in additional revenue to close the budget deficit, while affecting less than 7% of Connecticut taxpayers. Notably, even with this rate increase, the share of income paid in state and local taxes by Connecticut’s wealthiest 5% would remain smaller than what is paid by the “bottom” 95% of Connecticut families.
Closing corporate tax loopholes. ($130 to 150 million) Flaws in our corporate tax code are part of our revenue problem, costing Connecticut hundreds of millions of dollars in tax revenues each year.
Close Connecticut’s “Las Vegas Loophole” ($100-120 million). Flaws in state tax accounting rules enable many multi-state companies to artificially shift profits to subsidiaries in other states like Nevada, which has no corporate income tax. This enables them to avoid paying their share of Connecticut taxes, and shifts responsibility for taxes onto locally-owned businesses and individuals.
Connecticut should level the playing field for businesses in Connecticut by requiring “combined reporting” tax rules that are already in place in at least 22 other states, including neighboring New York and Massachusetts. This reform will fix arbitrary and unfair corporate tax "loopholes" that increase our state revenue gap.
Re-apply the corporation business tax to “S-Corporations” with graduated rates to protect small businesses ($20-30 million). Because of other loopholes, many large corporations do not pay corporation business taxes. Many of these “S-Corporations” are major businesses. In 2003, 18 of the state’s 100 largest business paid only a $250 business entity tax, which applies to these S-Corporations and certain other classes of businesses. Requiring that large corporations pay the corporation business tax, and establishing lower, graduated rates for small businesses, will result in a more fair and broad-based tax system.
Scaling back public subsidies to the entertainment industry ($90 to 100 million). Connecticut’s blank check to the entertainment industry is part of our state budget problem. The State of Connecticut is excessively generous to film companies, paying for 30% of the cost of making movies, regardless of how much income tax the companies owe the state. The costs of these film tax credit subsidies far surpass the amount given in tax credits to any other industry. These film subsidies are a blank check. There is no cap on the amount of money the state can lose through these tax credits.
The State’s own study, conducted by the Department of Economic and Community Development, estimated that the tax credits do not pay for themselves. For every dollar the State spends on film tax credits, it only gets back 20 cents, a loss of 80 cents on the dollar. (The study estimated 6 cents in increased revenues and 13 cents in budget savings would result from the tax credit expenditures.) Setting a cap on Connecticut’s film tax credits will begin to set some reasonable limits on the program and help to close our state revenue gap.
Increasing the sales tax by one percentage point ($575 to 625 million). We can also limit any harmful effects of this increase by creating a state earned income tax credit (EITC) to help working families (cost of $50 million) and a small business property tax credit (cost of $100 million). Both the small business credit and a state EITC would also act as an economic stimulus.
Increasing cigarette and alcohol taxes ($78 to 80 million). Increasing cigarette taxes will not only raise revenue, it will discourage smoking, particularly among Connecticut’s children and youth, thereby reducing long-term health costs.
Increasing income taxes for those who can best afford it (increased revenues: $0.8 to 1.2 billion). Connecticut’s wealthiest families pay 4.7% of their income in state and local taxes (after federal tax deductions for state and local taxes).
By comparison, middle-income families pay 10.2% and low-income families pay 10.9% of their income in state and local taxes. Increasing income taxes for the wealthiest residents will help to make our tax system more fair and to close the state revenue gap. Adopting higher income tax brackets for married couple families over $200,000, as recommended by the Better Choices for Connecticut coalition, would raise an estimated $1 billion in additional revenue to close the budget deficit, while affecting less than 7% of Connecticut taxpayers. Notably, even with this rate increase, the share of income paid in state and local taxes by Connecticut’s wealthiest 5% would remain smaller than what is paid by the “bottom” 95% of Connecticut families.
Closing corporate tax loopholes. ($130 to 150 million) Flaws in our corporate tax code are part of our revenue problem, costing Connecticut hundreds of millions of dollars in tax revenues each year.
Close Connecticut’s “Las Vegas Loophole” ($100-120 million). Flaws in state tax accounting rules enable many multi-state companies to artificially shift profits to subsidiaries in other states like Nevada, which has no corporate income tax. This enables them to avoid paying their share of Connecticut taxes, and shifts responsibility for taxes onto locally-owned businesses and individuals.
Connecticut should level the playing field for businesses in Connecticut by requiring “combined reporting” tax rules that are already in place in at least 22 other states, including neighboring New York and Massachusetts. This reform will fix arbitrary and unfair corporate tax "loopholes" that increase our state revenue gap.
Re-apply the corporation business tax to “S-Corporations” with graduated rates to protect small businesses ($20-30 million). Because of other loopholes, many large corporations do not pay corporation business taxes. Many of these “S-Corporations” are major businesses. In 2003, 18 of the state’s 100 largest business paid only a $250 business entity tax, which applies to these S-Corporations and certain other classes of businesses. Requiring that large corporations pay the corporation business tax, and establishing lower, graduated rates for small businesses, will result in a more fair and broad-based tax system.
Scaling back public subsidies to the entertainment industry ($90 to 100 million). Connecticut’s blank check to the entertainment industry is part of our state budget problem. The State of Connecticut is excessively generous to film companies, paying for 30% of the cost of making movies, regardless of how much income tax the companies owe the state. The costs of these film tax credit subsidies far surpass the amount given in tax credits to any other industry. These film subsidies are a blank check. There is no cap on the amount of money the state can lose through these tax credits.
The State’s own study, conducted by the Department of Economic and Community Development, estimated that the tax credits do not pay for themselves. For every dollar the State spends on film tax credits, it only gets back 20 cents, a loss of 80 cents on the dollar. (The study estimated 6 cents in increased revenues and 13 cents in budget savings would result from the tax credit expenditures.) Setting a cap on Connecticut’s film tax credits will begin to set some reasonable limits on the program and help to close our state revenue gap.
Increasing the sales tax by one percentage point ($575 to 625 million). We can also limit any harmful effects of this increase by creating a state earned income tax credit (EITC) to help working families (cost of $50 million) and a small business property tax credit (cost of $100 million). Both the small business credit and a state EITC would also act as an economic stimulus.
Increasing cigarette and alcohol taxes ($78 to 80 million). Increasing cigarette taxes will not only raise revenue, it will discourage smoking, particularly among Connecticut’s children and youth, thereby reducing long-term health costs.
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