Rell Seeks Series Of Fee Increases
By CHRISTOPHER KEATING
The Hartford Courant
March 8, 2009
Doctors. Lawyers. Plumbers. Lobbyists. Teachers. Architects. Private detectives. Barbers. Hairdressers.
With the state facing a massive budget deficit, citizens from virtually every walk of life will be paying higher fees starting in July under a proposal by Gov. M. Jodi Rell. Although refusing to call for any tax increases, Rell is trying to close the gaping deficits with spending cuts, billions of dollars from the federal stimulus package and the state’s “rainy day fund” – and with fee increases.
From getting a marriage certificate to running a bar or getting a fishing license, it will cost you more money whenever you deal with the state government.
For the average driver, Rell’s budget would mean an increase in the two-year registration renewal fee to $85, up from the current $75. A driver’s license, which lasts for six years, would cost $78, up from the current $66. Even the price of the state’s “blue book,” the famed, 984-page directory of every state agency, is going up.
All told, Rell is proposing raising costs for permits, licenses and registrations for individuals and businesses in more than 1,000 categories.
It could get even worse. The legislature’s finance committee is studying a more comprehensive list of nearly 1,800 fees from 27 different state agencies. Many of them have not increased since the last major fiscal crisis in 1992 – soon after the creation of the state income tax.
Senate Majority Leader Martin Looney, a New Haven Democrat, said that increases are unavoidable as the state struggles with a projected deficit of $8.7 billion over the next two fiscal years.
“It’s a given that fee increases of some sort will be part of the overall package,” Looney said. “It’s clear that fees have to be raised, but not necessarily exactly as the governor proposed.”
Rell estimates that the increases could generate an extra $100 million in the next fiscal year, but that total could increase if the list is expanded.
The motor vehicles department would be raising more than 70 fees on virtually anything that moves on wheels, including cars, trucks, school buses, motorcycles, farm vehicles, campers and hearses.
For liquor permits alone, Rell is pushing for hikes in more than 65 categories, including permits issued to country clubs, hotels, restaurants, beer wholesalers, universities, nonprofit clubs, bowling alleys, racquetball clubs, catering halls, casinos and package stores.
Opposition
Even though legislators and the governor say that increases are una- voidable, a parade of interest groups has told the tax-writing finance committee that the increases are a bad idea.
The state’s society of certified public accountants opposes the planned hike in the CPA license fee up to $565, about a 25 percent increase.
“Before the proposed increase, Connecticut already has the highest CPA license fee in the country,” Arthur Renner, the group’s executive director, said in written testimony to the legislature. “The next highest fee is $270 in the state of Texas. The license fee in Connecticut exceeds the national average of $86 by 523 percent.”
Likewise, the state’s professional engineers say they, too, have the nation’s highest renewal fee at $225 a year when many states have similar fees of less than $50 annually.
One group that might receive a reprieve is nurses, whose fees doubled in 2007. The burden is even higher on advanced practice registered nurses because they must hold both an APRN and an RN license.
“Connecticut is facing a severe nursing shortage, and our members and colleagues believe that significantly raising fees again during this period of crisis is inappropriate,” said Mary Jane Williams, an active member of the state nurses association and the chairwoman of nursing at the University of Hartford.
Sen. Eileen Daily, the co-chairwoman of the legislature’s finance committee, said that lawmakers are aware of the issues regarding the nurses and are studying exactly how to raise the fees on a wide variety of groups.
Carroll Hughes, the chief Capitol lobbyist for the package stores associ- ation, said the owners are not especi-
ally bothered by fee increases – in order to avoid something even worse.
“We went in and offered a doubling of all the liquor-permit fees for $14 million, instead of an excise tax on the cost of alcohol that would make us less competitive with Massachusetts,” Hughes said. “Don’t increase the cost of the product. That just pushes people out of state. Increase something we can absorb. If it’s done on the product, it hurts you.”
Although Hughes says the package stores are willing to accept a doubling of their fees, Rell’s proposal calls for boosting the $400 annual fee to $500 – an increase of 25 percent.
Issues Of Equity
Rep. Craig Miner, the ranking Republican on the budget-writing committee, said that he would not support fee increases unless the Democrats make fundamental spending cuts first.
“I don’t intend – to be perfectly clear – to support fees, taxes, and voodoo economics and leave the cost of doing business in Connecticut unresolved,” Miner, of Litchfield, said. “The legislature and the governor would be sending a very bad message if we focused on the revenue side only – to the detriment of the state of Connecticut.”
Rell’s spokesman, Christopher Cooper, said that state officials are looking at the full menu of fees, noting that the fee to operate a bakery has not increased in 30 years.
“In many cases, the fees don’t even cover the cost of a regulated activity,” Cooper said.
Legislators are also looking at the fairness of the fees. Whether anything can be done about it is another question.
Attorneys, for example, currently pay $450 a year – which Looney says was tripled from $150 during the last gigantic fiscal crisis, which led to the creation of the state income tax in 1991. The problem, though, is that the first-year student out of law school and the top defense attorneys in the state all pay the same $450.
“They make no distinction between the $1 million-a-year senior partner and the solo lawyer,” Looney said.
“The same applies to physicians as well.”
Even though some people might complain about the fees, Looney concedes that the total increase of about $100 million is dwarfed by the money from the state income tax, which is expected to generate $6.6 billion this year, and the state sales tax, which will generate $3.3 billion in the current fiscal year.
“Everything is small change, really, except the income tax and the sales tax,” Looney said.
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