The Hartford Foundation submitted testimony to the General Assembly's Finance, Revenue and Bonding Committee on H.B. 7322, An Act Concerning State and Local Revenue. The bill included a wide range of tax proposals to help fund the state's two-year budget. The Foundation voiced its opposition to a specific provision within the bill that seeks to repeal the sales tax exemption for nonprofits. As a funder and supporter of the region's nonprofit sector, the Hartford Foundation urged legislators on the Finance Committee to consider the cumulative effect of state budget cuts and a new sales tax. Such a change would limit the impact of private dollars, potentially widen Connecticut's significant opportunity gap, and undermine the chance for all our residents to reach their full potential and allow the state to prosper.
Testimony Opposing Provisions of H.B. 7322
An Act Concerning State and Local Revenue
Hartford Foundation for Public Giving
Committee on Finance, Revenue and Bonding
April 25, 2017
Senator Fonfara, Senator Frantz, Representative Rojas, Representative Davis, and distinguished members of the Finance, Revenue and Bonding Committee:
The Hartford Foundation for Public Giving is the community foundation for the 29-town Greater Hartford region. We are the largest community foundation in Connecticut, and among the largest 20 community foundations in the country with a mission to put philanthropy into action to promote equitable opportunity for all residents in our region. The Foundation is committed to working with our donors, nonprofits and community partners to ensure a vibrant and strong Greater Hartford region. We oppose the provisions in H.B. 7322 which repeal the sales tax exemption for nonprofits.
At a time when our state and many of our communities face significant challenges, through the generous support of our donors, we awarded 2,287 grants amounting to $33.3 million last year to nonprofits that provide essential services to residents in our region. Recognizing the significant impact of the 2016 budget cuts on area nonprofits, the Foundation also responded with Transitional Operating Support (TOS) grants of nearly $1.4 million to 18 agencies, helping them to continue providing critical programs, and our Nonprofit Support Program (NSP) provided tools, knowledge and funding for agencies to address the changing fiscal environment in a strategic and sustainable way, including 78 capacity-building grants totaling $1.9 million.
Yet, the Foundation's dollars cannot fill the state's fiscal gap or substitute the state's commitment to its most vulnerable residents. The cumulative effect of state budget cuts and a new sales tax on nonprofits limits the impact of private dollars and threatens to widen Connecticut's opportunity gap, undermining the chance for all of our residents to reach their full potential and the state to prosper.
We need the leadership of our public sector partners to leverage our long-term commitment to our communities. We urge the committee to amend the bill language so as not to repeal the current exemption, and to consider more equitable options for generating revenue to continue critical investments, in partnership with philanthropy, in education, health and other essential services.