State Senator David J. Cappiello, R-Danbury, today supported legislation that makes revisions to the current state budget.  According to Sen. Cappiello, the $16.1 billion measure, which passed the Senate by a vote of 35-1, provides an additional $115 million for municipalities for this year including a one-time $30 million grant.  The budget puts $190 million into the state’s “Rainy Day Fund,” increases the property tax credit from $350 to $500 and repeals the 15% corporate tax surcharge in 2007.  In addition, the revised budget fully funds the Teachers’ Retirement Fund (TRF) for the next two fiscal years.

“All in all this a good budget compromise,” said Sen. Cappiello.  “The important thing to remember is that the budget bill that left the Appropriations Committee last month would have left us in a $1.2 billion hole.  This legislation increases spending by $400 million, provides $140 million in tax cuts and still puts money into the Rainy Day Fund.  It accomplishes these things and stays under the spending cap by $185 million, so I believe it is a fair compromise.”

Sen. Cappiello, who serves as ranking member of the legislature’s Appropriations Committee and was heavily involved in the negotiation process, said that Republicans fought hard for the elimination of the inheritance tax but were met with resistance from the majority party.   However, he said the budget does call for the full funding of the Teachers’ Retirement Fund.  Under the legislation, $246 million of state surplus will be deposited directly into the pension fund to cover the costs for both FY’s 06 and 07.  Currently, due to years of under funding by the General Assembly, the retirement system has a shortfall of approximately $5.3 billion

“Fully funding the teacher’s retirement system stops the bleeding for two years,” said Sen. Cappiello, who has sponsored legislation requiring a constitutional amendment to fully fund the TRF the past four years.  “Considering the TRF has been fully funded only one time in its entire history, this is hopefully an indication that we are headed in the right direction.”

“While this budget is by no means perfect it is responsible.  It contains modest increases in state spending and modest decreases in taxes.  Whether it’s the repeal of the corporate tax surcharge to help our state’s business community or providing $20 million in additional funding for Special Education, this budget does good things and does them in a responsible manner.”