I am pleased that the comprehensive study of Connecticut’s tax system recently completed by the legislature’s nonpartisan Program Review & Investigations Committee has attracted a great deal of attention, both from the press and the public.

We learned how the tax burden is distributed, and concluded, to no one’s surprise, that the property tax is an unacceptable burden which needs to be addressed if we are to maintain a fair, equitable, balanced revenue system. Total state and tax collections for Fiscal Year 2003 came to $15.722 billion. Of that, 39.7 percent came from local property taxes; 27 percent from personal income taxes; 19.2 percent from sales and use taxes; 3.2 percent from corporate taxes; 3.5 percent from other business taxes; 1.2 percent from inheritance and estate taxes; 1.9 percent from alcohol and tobacco taxes; 2.9 percent from motor fuels taxes; and 1.4 percent from other state taxes.

The PRI committee has voted to draft legislation on several recommendations.  In the next few weeks, public hearings will take place in Hartford to gather additional citizen input on the proposals.  Also, the detailed research on options such as a Connecticut version of California’s Proposition 13 or Massachusetts Proposition 2.5 will guide debate on similar proposals in the Finance Committee.  This year’s PRI study will be used for many years as the General Assembly reviews tax reform proposals. 

Some new bills are being drafted.  First, to correct a flaw in our legal protections, we will offer a bill to protect taxpayer privacy and prohibit any legislator or staff person from gaining access personal financial information. We will also require a report to identify unfunded mandates on municipalities and ask for plans to eliminate or reduce such costs to our towns.  We will ask the state Department of Revenue Services to study the impact of requiring that anyone who does business with the state be in compliance with state tax laws.  And we will take steps to make the Department of Revenue Services more taxpayer friendly with a “Taxpayer Bill of Rights.”  We are also acquiring software to help the legislature determine the implications of changes to tax policy.  In the future, the DRS will be able to use their information (with privacy protected, of course) and the software to look at future trends in tax policies. The Finance Committee will debate tax reform options using the PRI detailed research on options such as a Connecticut version of California’s Proposition 13 or Massachusetts Proposition 2.5. 

We undertook this study to provide a long term look at reform and to assess whether our revenue system was balanced, fair, neutral, easy to understand, and competitive.  This was not a study to look at how to raise taxes.  It offers options and recommendations that honor the cap on state spending and specifically does not call for increased taxes.