State Representative Says Groton Should Be Allowed To Tax Manufacturing Equipment

State Rep. Edward Moukawsher said Tuesday he has filed a bill that would allow municipalities like Groton to tax businesses on manufacturing equipment, possibly sparing the town lost state revenue.

The measure is important because Groton is facing a decline in state revenue, mostly because of the proposed elimination of a tax relief program on machinery and equipment for some businesses.

The payment in lieu of taxes program allows businesses, including Pfizer and Electric Boat, not to pay property taxes on certain pieces of equipment. The state has traditionally paid municipalities a portion of those taxes, but the governor's proposed budget would cut the payments. As a result, Groton could lose $1.7 million next year.

“I’m still going to pursue it. I don’t think this is over yet," Moukawsher told town councilors at a meeting Tuesday night. The council met with Moukawsher (D-Groton), State Rep. Elissa Wright (D-Groton) and State Sen. Andrew Maynard, whose district includes Groton, to discuss the impact of the proposed state budget.

Moukawsher said he filed the bill, but it has not been raised, or moved forward, in the finance committee. He said he might also try to put the measure into other legislation to give Groton taxing powers. He said companies like Pfizer have enjoyed tax breaks but still recently announced plans to lay off 1,100 people.

However, Moukawsher said the proposal could be a difficult sell if the governor’s position is to spare business by forgiving the tax.

Groton Town Manager Mark Oefinger said the budget is relatively friendly to municipalities, but didn’t hold Groton harmless. The town would lose $350,000 in state money in the coming fiscal year, not including the $1.7 million loss from the tax program.

“Everybody we have talked to has given (us) the impression they want to make this right,” he said.

Wright said she spoke to Benjamin Barnes, the secretary of the Office of Policy and Management, on Monday about the impact of the tax program elimination on Groton.

The town has historically been in the top five municipalities receiving money through theprogram, but was not included in recent discussions about the issue.

Oefinger said the state mistakenly believed the town was not affected, because Groton was listed as receiving zero dollars from the program last year. Oefinger said this was because one of its major employers, Pfizer, applied for the tax exemption late and was denied.

Oefinger said the good news is the town can now collect tax on the company’s manufacturing equipment for that year.