Home

Friday Facts

Foundation Facts

Membership

Services

Energy Program

Staff

Workforce Development

Events

Resources

Publications

Privacy Policy

Sponsors

Current Week  

February 28, 2003

Budget passes both House and Senate and is on its way to Governor Rowland who is expected to sign it into law. New clothing exemption allowance set for April one. Shift back to legislative issues. Retail news and notes. Upcoming events. COR update.

· After a wild - and very long - 48 hours of arm twisting and persuading, the Connecticut General Assembly adopted a deficit reduction plan that fixes a pressing problem, at least for today.

· Faced with the prospect of having to borrow money to close a $650 million budget shortfall for this fiscal year if they did not act, the House of Representatives started things off Tuesday afternoon.

· Speaker of the House Moira Lyons (D - Stamford) called the House into session on Tuesday afternoon and after taking action on some other business, recessed the House and began the process of trying to gather the necessary votes for passage.

· With the Democrats holding a 94-57 advantage, Lyons needed just 76 votes for passage. The problem for her was that she could only muster 44.

· As the day moved into the evening and the evening moved into the early morning, Governor Rowland became actively involved in trying to persuade the House Republicans to support the bill. Meanwhile, Lyons worked over her caucus to increase her number from 44 votes to somewhere in the mid-fifties.

· After nearly 16 hours of waiting, a vote was taken at approximately 9:30 am. After a feisty but overall short debate, the package was approved 79-68.

· Passage of the budget would not have happened without speaker Lyons and the Governor working overtime to get the necessary votes.

· Senate takes quick action Wednesday to pass budget

· Following the House's action on Wednesday morning, the State Senate passed the budget later that evening (actually, Thursday morning).

· Similar to the House, the Senate passage was in doubt until Governor Rowland persuaded six Senate GOP members to support it.

· However, unlike the House, where there were furious and sometime nasty confrontations and debates, the Senate barely debated the budget. In fact, after the customary summaries were given by the chairs of the appropriations and finance committee, a vote was called for.

· Senate action took no longer than ½ hour with no amendments called and no questions or debate.

Budget highlights

· Like virtually all interest groups and interested parties at the capitol, the budget is not the best by any measurement for retailers.

· In the end the package that was approved included:

· A lowering of the clothing allowance from $75 - $50 (effective April 1, 2003).

· A new 3% sales tax on the production of cooperative direct mail advertising.

· A corporate surcharge of 20% for this year.

· The bill also calls for increasing the state income tax for joint filers with an adjusted gross income of more than $44,000, heads of households earning more than $35,000 and individuals more than $22,500 annually.

· Remember when the talk was just to increase the millionaire's tax?

· The bill also will impose a new 6% sales tax on newspapers, magazine subscriptions and health clubs.

· The cigarette tax will be boosted by 40 cents, to $1.51 (no tax on cigars) and the conveyance tax on real estate would be increased on all commercial and residential property.

· The bill also call for some $130 million in saves, primarily through program cuts and an early retirement package for state employees, but does not mandate the governor hire back all of the state employees that have already been laid off. That was a blow to organized labor leaders that pushed hard for that inclusion in the budget.

Now for the next round

· If you think this round of fixing the state budget problem was fun, wait until the next round. 

· Remember the governor still must submit his fiscal year 2004 - 2005 budget, which he has put off until the current year deficit was fixed.

· The passage of the budget deficit plan this week fixes this years budget and raises some revenue for the next two years, but still leaves the state with a almost identical deficit number for fiscal year 2004 - 2005 - some $700 million.

· The governor has first crack at trying to solve that deficit when he introduces his budget sometime next week. We can't wait.

Other news from the capitol

· In addition to all the budget stuff going on, the Planning and Development committee held a public hearing on SB 393, AAC a Municipal Gross Receipts Tax on Certain Large Retail Facilities.

· This bill would impose a new tax of one percent on any retailer that has gross sales of more than $10 million per year. We testified as strongly as possible against this bill.

· We don't think it has enough support to pass out of committee, but will be keeping a close eye on it.

· The Banks committee held a public hearing this week on two bills that would impact retailer credit operations.

· Both HB 5004, AAC Credit Card Payment Dates and HB 5005, AAC Credit Card Billing Cycles would negatively impact retailers.

· We spoke to both the House Chair of the Banks committee, Rep. Doyle (D - Wethersfield) and the Sponsor of the bills, Rep. Stripp (R - Westport) to let them know of our opposition. We do not think these bills will move out of the Banks committee.

· With the budget battles over at least for the short term and more attention shifting back to pending legislation, we will keep you up to date on what committees are up to in next weeks Friday Fax. 

· In the meantime, if you have any questions about pending legislation, please feel free to email me at tim@crmaonline.com

Retail news and notes

· On Wednesday February 26th, the Wall Street Journal ran a front-page story on Gift Cards that are gaining in popularity with retailers across the country and getting the attention of regulators as well. Check out the story at www.wsj.com

· On Tuesday of this week, Federated Department stores (a valued member of CRMA) announced that Terry J. Lundgren, will succeed James M. Zimmerman as chief executive. Mr. Zimmerman will remain as chairman.

· Finally, while no surprise to most retailers, consumer confidence fell to its lowest level in nearly 10 years in February as Americans worried about jobs, and oil prices in the wake of a possible war with Iraq.

Upcoming events

· First Legislative Breakfast Meeting of 2003 will be held on Wednesday March 5th from 9:00-10:00 a.m. at Westfield Shoppingtown in Enfield.

COR update

· Watch for COR news update in our next edition of Friday Facts.

February 21, 2003

Sen. passes budget that governor quickly veto's. Planning and Development Committee to hold informational hearing on "smart growth" while scheduling a public hearing on gross receipts tax. Big city mayor on trial. Retail news and notes. Upcoming events and COR Update.

· As expected the State Senate passed the budget that was sent to them by the House of Representatives earlier this week. And like their colleagues in the House the budget was adopted along party lines, with no Republican support. 

· Also, as expected Governor Rowland vetoed the bill, reasoning that the budget was tilted with far too many taxes. In fact when asked if the reason he vetoed the budget was because of a provision to hire all 2,800 state layoff employees back, Rowland's response was, "No, no… the deal breaker was the taxes"

· With the governor's swift veto, Democrat's are left with one of two options. They can wait for the Governor to unveil his proposed budget for 2004 - 2005 which will also include plans to reduce the current year deficit or they can attempt to reach a deal with the governor before his address on February 27th.

· For the Governor the decision to veto has left him in a position in which he needs to reach an agreement with the Democrats or he will be forced to make drastic cuts in states services (which he may do anyway) and propose taxes increases - which he would like to avoid at all cost.

· So both parties in the budget battle are properly motivated to reach a deal.

· And the Republican in the House and Senate are now back in the mix. Apparently the Governor and the Democrats feel they will not be able to obtain the necessary votes without Republican votes.

· This could be good news for retailers and the business community. If things work out, the inclusion of the Republican leaders in the budget negotiations leads one to believe that they will bring some republican votes, but only if there is sufficient cuts in spending and less tax increases. 

· All sides have agreed to give this one last try and will be meeting privately (of course, no public hearing) on Sunday and may be ready for a vote by Monday or Tuesday of next week.

· We keep you up to date with latest info.

Planning and Development committee springs into action

· The Planning and Development committee will be busy in the next week with issues that have major implications for retailers.

· Today they will be holding an "informational hearing" on smart growth. They have invited a number of speakers and will be trying to gather as much information on the issues so that they can draft a bill. 

· We have already met with the Sen. Chair of the Committee, Sen. Fonfara (D - Hartford) and will meet with House Chair, Rep. Lew Wallace (D - Danbury) some time next week. 

· We will keep you abreast of this issue as it develops. In the meantime, if members have particular concerns on the issue of smart growth, please email or call us today.

· P&D will also hold a public hearing on a bill that would impose a gross receipt tax on retailers.

· SB 393, "AAC a Municipal Gross Receipts tax on Certain large Retail Facilities", was introduced again this year by Sen. Genuario, (R- Norwalk).

· The bill would allow municipalities to impose a tax on "not more than one per cent on gross receipts of any retail facility located in such municipality that has gross receipts generated by consumer transactions of more than ten million dollars…"

· The bill goes on to say that the municipalities imposing the tax must share with the revenue collected with surrounding towns.

· We strongly oppose this bill and will testify against it next week. If you have thoughts on this bill again, please feel free to email us at www.crmaonline.com or call us at 860 - 527 - 1044.

Big City mayor on trial

· In case you have not been following it or if you are just interested in good old fashion political corruption trial, Bridgeport Mayor Joseph Ganim is on trial in federal court in New Haven.

· If your are interested and don't buy the local papers, we suggest you visit www.ctpost.com for the latest in the rather interesting trail.

Retail news and notes

· Earlier this week, snow hampered retail sales on President's Day, though many retailers have extended their sale events through this week. More details can be found at Women's Wear Daily at www.wwd.com.

· Retailers have a tough time convincing financial markets that growth has its limits. Do Wall Street Analysts get it? See the January 2003 issues of Stores for some interesting reading or visit www.stores.org.


Upcoming events

· Legislative Breakfast meetings are being planned for the next few months. Watch for details on our March 5th meeting at Westfield Shopping Town in Enfield and March 20th at Stamford Town Center!

COR Update

· COR is expanding its horizons. Plans are underway to involve non-traditional populations in the training program.

· COR will re-focus on skills employees need, and those demanded by employers. What skills would you like your entry-level workforce to know?

· Sharing your training materials or sending a message (anonymous if you wish) concerning what makes or breaks an employee, will help shape COR's new curriculum, and will help you find the employees you are looking for!

· Send your thoughts and participate in COR by contacting Michele Mesek at 860-527-1044 x11, michele@crmaonline.com, 60 Forest Street Hartford, CT 06105.

February 14, 2003

House passes budget early this morning. Governor Rowland promises veto. General Law Committee holds public hearing on various gift certificate and gift card bills. Retail news and notes. Member service update. COR update.

· Early this morning, the House Democrats approved a deficit reduction plan. 

· After more than four hours of debate and backroom discussion the House approved a budget that includes more than $800 million in new taxes over then next two years.

· Among the low lights of this budget, which if passed in the Senate are destined to be vetoed by the Governor include:

· Lowering of the clothing exemption allowance form $75 to $50 

· Imposing a 6% sales tax on all "cooperative direct mail advertising'

· Increasing the cigarette tax by 0.40 per pack, from $1.11 to $1.51 per pack of 20.

· The package also includes an increase in the rate of tax on personal income for families earning more than $100,000 and individuals earning more than $53,000.

· Pharmacy retailers will also see their dispensing fees reduced by 0.15 for each prescription dispensed under the Medicaid, SAGA, ConnPACE and AIDS drug assistance programs from $3.85 to $3.60.

· House Democrats have also included in their plan business tax surcharges of 20% for 2003 and 10% for 2004.

· The surcharge will apply to the corporation tax and to the annual $250 tax on LLCs, LLPs, LPs and S corporations.

· No Republicans voted for the package.

Rowland promises veto

· Even before the House attempted to vote on this smorgasbord of tax increases Governor Rowland held a press conference to say that he will not sign the Democratic bill.

· Rowland strongly opposes the Democratic plan, arguing that is tilted way too much towards tax increase with little attention paid to spending reductions and no savings from labor concessions.

· Democrat's claim they have cut spending by some $310 million, Rowland counters that it is closer to $150 million. In addition, the Democratic plan adopted has language in it that ensures both an early retirement program for state employees and a return to work provision for all 2,800 state workers who have been laid off.

· Rowland's response to those components of the package was this "I think its not only unlawful, it's probably unconstitutional"

On to the Senate 

· Despite the near certain veto by the Governor the Senate is set to take a vote on this package as early as Tuesday morning.

· Sen. President Sullivan is confident he has the votes in his caucus. That remains to be seen.

· Remember the Senate R's, like their counterparts in the House, have stated they will not support any package that includes tax increases.

· That would mean Sullivan will have to keep all his troops in line. He may be confident, but others around the Capitol are not so sure.

· If the Senate does in fact vote on the bill Tuesday it will be an interesting day.

· We expect the Senate to pass and the governor to quickly veto setting the stage for what may be a long summer.

General Law Committee holds hearing on gift certificates and gift cards

· On Thursday of this week there was no other business at the Capitol other than budget battle's.

· The General Law committee held a public hearing on the issue of gift certificates and gift cards.

· CRMA testified before the committee asking them to allow retailers the most flexibility in dealing with these issues.

· We attempted to bring to the attention of the committee members that gift certificates and gift cards are separate and distinct issues and should each be dealt with on their own.

· The general consensus we got from members of the committee is that they are looking at putting absolute expiration dates, perhaps three years on all gift certificates.

· With regard to gift cards, it is our sense that the General Law committee is interested in the so-called dormancy fee that retailers charge customers.

· The general law committee has until March 25, 2003 to act on these issues. If you have questions or concerns on gift certificates or gift cards, please email us today at www.crmaonline.com or call us at 860 - 527 -1044.

Retail news and notes:

· Some quick hit retail notes from this past week:

· Home furniture manufacture Drexel Heritage announced this week it will be opening a store in Orange, CT at the site of a former Filenes Basement on Rt. 1.

· Electronics retailer Nobody Beats the Wiz announced they would be closing stores this summer. They have only one in CT and we don't expect that it will remain open.

· Atticus Bookstore and Weslyan University announce that they may part ways after a nearly 25 year relationship.

· University officials are considering finding a new retailer to run the campus bookstore. The university has not entered negotiations with any other retailers yet.

Member Service Reminder
· Remember that CRMA members are eligible for great savings on all conference calls with Connex International, as part of a new member service program.

· Connex is one of the nation's leading providers of conferencing services including MEETNow Reservation-less (which is an easy and great way to hold a conference call) Web Conferencing and Event programs.

· To sign up for any program Connex offers or to get more information, contact Charlie Dammling, VP Sales at Connex International at 
800-426- 6639 x208

COR UPDATE:
· COR visits the REACH program in West Hartford. Retailers in West Hartford and surrounding areas will receive applications early next week.

· Partnership details with Capital Community College will be finalized soon. We'll keep you posted!

· Become a participant in COR by contacting Program Director Michele Mesek at michele@crmaonline.com or 860-527-1044 x11.