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Hotel Tax Increase Approved By House

Amanda Falcone

April 30, 2010

The state hotel tax would rise from 12 percent to 15 percent under a bill that passed the state House of Representatives by an 88-50 vote late Thursday and is headed for action in the Senate.

One-third of the 3 percentage point increase would go to the cities or towns where the hotels that collected the money are located; two-thirds would go to the regional planning organizations on a pro rata basis.

All hotel tax revenue currently goes into the state's general fund.

Regionalization requires coordination and start-up money, and that's why giving cities and townsa portion of the money collected from the state hotel tax is so important, said Rep. Brendan Sharkey, D-Hamden.

The state has 15 regional planning organizations, and, hopefully, tourism is a priority for those organizations, said Sharkey, cochairman of the legislature's planning and development committee.

Based on projections, Connecticut's finances will not improve any time soon, Sharkey said, and lawmakers need to find ways to help cities and towns diversify their revenue streams regardless of the economy. Municipalities are relying too much on a property tax, he said.

"The property tax is choking our state," Sharkey said, adding that regionalization efforts could result in future savings. "We have to do something. We have to act now."

Action might be needed, but Rep. T.R. Rowe, R-Trumbull, questioned whether a higher tax was the answer.

"We always seem to attempt to solve problems by raising revenue," he said. "It's how can we squeeze more from the taxpayers or the tourists."

Rowe also said he worried that increasing the hotel tax would hurt the state's competitiveness, particularly in tourism locations.

Some cities and towns have expressed concern, but, generally, the tax increase would not hurt the state, Sharkey said, and the extra money that cities and towns would get would more than offset any potential loss.

The Office of Fiscal Analysis estimates that the hotel tax increase would generate $9.4 million in fiscal 2011, which starts July 1, and $18.8 million in fiscal 2012 for cities and towns and regional planning organizations.

Hunting, Fishing Licenses

The Senate passed a bill, 25-9, that would give those who purchased a fishing or hunting license, permit or tag between Oct. 1, 2009, and April 14 a credit equal to the difference between the amount originally paid and the amount the fees were reduced to in April. Last month, lawmakers reduced fishing fees from $40 to $28 and hunting fees from $28 to $19. In 2009, lawmakers had increased the fees, but now they say doing so was a mistake, and they are trying to make amends. The bill now goes to the House.

Technical Schools

The Senate unanimously passed a broad-based bill that would improve the technical school system. The bill would require the State Board of Education to hold a public hearing before closing or suspending the operation of a technical school. It would also require the system's superintendent to share statistics annually with lawmakers about the employment status of technical school graduates and about the availability of resources, and it would help the system secure state funding.

If money were available, the State Bond Commission would be required to vote twice a year on whether to issue the system at least $2 million for general maintenance and trade and capital equipment.

Finally, the bill would require the state to place any technical school bus that is 12 years old or older, or has been subject to an out-of service order to two consecutive years for the same reason. The bill now goes to the House.