NOTE: Updated with responses from Malloy administration agencies
Heralded as groundbreaking legislation designed to promote energy efficiency and reduce greenhouse gasses, in 2007, Republican Governor Jodi Rell signed legislation that “permanently” exempted weatherization products and energy-efficient light bulbs from the Connecticut State Sales Tax.
The legislation, which was overwhelmingly adopted by the Democratic-controlled Connecticut General Assembly, was cited as one of the state’s major accomplishments.
Gina McCarthy, then Connecticut’s Commissioner of Environmental Protection and now the head of the United States Environmental Protection Agency, highlighted the “landmark” legislation in her 2007 Annual State Report entitled Protecting and Restoring our Environment.
In a 2014 national EPA report on “Existing State Policies and Programs that Reduce Power Sector CO2 Emissions,” McCarthy’s agency explained the importance of “State tax incentives for energy efficiency,” writing
“…sales tax exemptions…spur private sector innovation to develop more energy efficient technologies and practices and increase consumer choice of energy-efficient products.
To this day, the federal government promotes Connecticut’s sales tax exemption law on its Department of Energy website
However, just two weeks ago as world leaders, including Gina McCarthy, worked around the clock to develop the historic Paris Agreement on Climate Change, Governor Malloy and Democrats in the Connecticut General Assembly repealed Connecticut’s important sales tax exemption on weatherization and energy-efficient light bulbs as part of their “Democratic Budget Deal.”
The reason remains a mystery, but faced with a growing state budget deficit the Democrats’ “budget mitigation bill” included a variety of budget gimmicks, significant cuts to important human services and education programs, a major tax break for General Electric (and a handful of other large companies) and a sentence repealing Connecticut General Statutes Sec. 12-412k. [The state statue that exempts residential weatherization products and energy-efficient light bulbs from the state sales tax]
Section 12-412k. (a) For purposes of this section, “residential weatherization products” means programmable thermostats, window film, caulking, window and door weather strips, insulation, water heater blankets, water heaters, natural gas and propane furnaces and boilers that meet the federal Energy Star standard, windows and doors that meet the federal Energy Star standard, oil furnaces and boilers that are not less than eighty-four per cent efficient and ground-source heat pumps that meet the minimum federal energy efficiency rating.
(b) Notwithstanding the provisions of the general statutes, the provisions of this chapter shall not apply to sales of any residential weatherization products or compact fluorescent light bulbs.
With no public notice, hearing or debate, Malloy and the legislature simply voted to eliminate the sales tax exemption on residential weatherization products and energy-efficient light bulbs as of January 1, 2016.
The move will mean that Connecticut residents trying to weatherize their homes or buy energy-efficient light bulbs will pay an additional $3.6 million in sales tax to the State of Connecticut in FY 2016 and $7.5 million in FY 2017.
But, of course, perception is always more important than reality;
The recent move to reduce Connecticut’s commitment to energy efficiency and slow climate change didn’t stop Governor Malloy from making sure he was part of the news story and photo opportunity when EPA Administrator Gina McCarthy came to Connecticut last week to talk about the Paris Agreement.
As CT Newsjunkie reported with, “EPA Chief Returns to Hartford, Touts Paris Agreement On Climate Change,”
It was a homecoming of sorts for Gina McCarthy, the current administrator of the U.S. Environmental Protection Agency who served as the head of Connecticut’s Department of Environmental Protection from 2004 through 2009.
Flanked by Gov. Dannel P. Malloy and members of the Connecticut Auto Retailers Association, McCarthy returned to … to talk about the Paris agreement, under which 195 countries have committed to reducing greenhouse gas emissions.
She said climate change is one of the biggest “economic and national security challenges of our time,” and because of the leadership of President Barack Obama, “we were able to get an agreement in Paris that everyone should be proud of.”
McCarthy said the only reason they were able to push forward with a plan to reduce emissions here in the United States and a plan to lower the temperature of the climate globally is because states like Connecticut are paving the way.
The governor said Connecticut is doing its part to address the impact of global warming.
Several years ago the state passed legislation to reduce emissions by 80 percent by 2050 and it became the first “range confident” state for electric vehicles in the nation.
“Climate change is happening. Make no mistake about that,” Malloy said. “And it’s time to take action to address the challenge in a responsible and thoughtful way.”
It’s a problem we can’t fail to act upon, Malloy added.
Yup, Governor Dannel Malloy, who now serves as the head of the Democratic Governors Association (DGA) and therefore the spokesman for the country’s Democratic Governors actually spoke up about Climate Change saying, “It’s a problem we can’t fail to act upon.”
The only problem is that Malloy failed to tell EPA Administrator Gina McCarthy, the media or the public that he had, in fact, acted…
But alas, it was in exactly the wrong direction.
The 2007 legislation exempting weatherization and energy-efficient light bulbs passed the Connecticut House of Representatives on June 1, 2007 by a vote of 128 -19, with both present Speaker of the House Sharkey and Majority Leader Aresimowicz voted in favor of the bill. The next day the bill passed the Connecticut State Senate by a vote of 32-3 with now President Pro-Tempore Looney and Majority Leader Duff voting “Yes.”
The advocacy group, Energy Northeast, wrote about the original sales tax exemption stating;
Illustrating the bi-partisan and diverse stakeholder appeal of legislation requiring [greater energy efficiency] is Rhode Island’s 2006 efficiency procurement law [which] passed a Democratic-majority state Senate and House unanimously and was signed at a joint press event with the sitting Republican Governor a few days later. Similarly, Connecticut’s 2007 Efficiency Procurement legislation was passed overwhelming by a Democratic-majority state legislature and signed by a Republican Governor.”
But that was then and this is now…
Eight years after the bi-partisan commitment to promoting energy efficiency and with the issue more important than ever, Connecticut’s Democratic Governor and Democratic General Assembly decided that a few million dollars in additional state revenue was more important than continuing to help Connecticut residents weatherize their homes and buy energy-efficient light bulbs.
Requests for comment were made to Governor Malloy’s Office, the Office of Policy and Management and various agencies in the Malloy administration.
The Department of Revenue Services responded by email saying they would have no comment.
The Connecticut Department of Energy and Environmental Protection’s Communication Director responded as follows:
In these difficult financial times for our state, we recognize that tough decisions have to be made. In order to balance the state’s budget, the General Assembly has had to look at eliminating sales tax exemptions on many products and services.
While the sales tax exemption that covered many products used for weatherizing homes was certainly an added incentive for people to take action, we believe its elimination will not have a significant impact on the public’s appetite for energy efficiency projects.
Homeowners and businesses understand the importance of weatherization and energy efficiency – and the kinds of saving that can be achieved. This concept has become deeply embedded in people’s minds and even without an sales tax exemption there will continue to be a strong focus on saving energy.
You can read more about McCarthy’s visit to Connecticut last week via the CT Mirror’s EPA’s Gina McCarthy stops by with a Paris postcard