By State Senator Dan Debicella

The best ideas are usually the simplest. Here is a powerful one: Anytime Connecticut has a budget surplus, we should return it to families in the form of lower taxes. Automatically.

Surpluses are by definition over-taxing. The legislature sets a budget based on spending priorities, and if revenues come in over that spending level there is a surplus. While surpluses are definitely better than deficits, having a surplus year-after-year shows that taxes are too high. Since the income tax was created in 1991, the average state budget surplus has been $500 million, with this year’s surplus coming in at $263 million. Without a doubt, Connecticut families are being overtaxed.

So what has Connecticut done with all this money in the past? The General Assembly did what politicians always do if given the chance—they spend it! The legislature has seen surpluses as an excuse to load up the budget with earmarks and pork barrel spending. I believe that we should not allow politicians to spend our surpluses on frivolous spending that was not originally planned.

My proposal would require that fifty percent of any state budget surplus automatically be used to reduce taxes. The other fifty percent could be used to reduce debt or be added to the Rainy Day Fund. The only discretion the General Assembly would have is deciding which taxes to cut, and how to apportion the remaining surplus between debt reduction and the Rainy Day Fund.

The power of this simple idea is staggering. If we had this law in place since the income tax was created in 1991, it would mean a $600 tax cut for every family of four making over $50,000. Families making less than $50,000 would pay no income tax at all. Our debt would be reduced by $4 billion (a 25% reduction), saving taxpayers additional hundreds of millions of dollars in interest payments each year.

All these tax cuts and debt reduction would be achieved without cutting a single program, because we are only talking about surplus money.

We need to pass this law now to return our current $263 million surplus to families this year. With the economy slipping, energy prices rising, and healthcare costs squeezing the middle class, we need to return the surplus to families now. But the important aspect of my proposal is that it is not just a one-year fix—it is a permanent change in the way state government operates.

By taking away the power of state politicians to spend surpluses, we will give families an automatic tax cut and reduce our state debt. My proposal will stop the pattern of spending our surpluses, and begin to solve the problem of over-taxing our families in Connecticut.