This is the time of year when the General Assembly becomes consumed with the need to adopt a state budget that meets both the needs of the state and the expectations of taxpayers who, ultimately, have to pay for it.
As expected, Governor Rell unveiled her proposal in February and, also as expected, the Democrat majority put theirs on the table last month. What is different about this year, in a very positive way, is that we Republicans are not content to spend time trying to find good points to support in the Governor’s budget and wringing our hands in disgust at the Democrats’ proposal. The sad truth about both of those budget proposals is that, while they certainly represent efforts to accomplish lofty and worthy goals, both call for raising taxes at a time when taxpayers already feel overburdened.
The Republicans’ “No Tax Increase” alternative is a blueprint for appropriately funding necessary government programs and services – and even increasing funding in certain, key, areas – without raising taxes.
As a taxpayer, a business owner, and a legislator, I cannot justify support for any state budget that calls for raising taxes this year. Why? Right now, the state is looking at a $600 million budget surplus. In Fiscal Year 2006, we had a $1 billion surplus. Families that are struggling to pay mortgages, household bills and, possibly, college tuition – to say nothing of all the other taxes we pay – would be justifiably angry about being forced to pay a higher state income tax bill when the state already has lots of money – our money – in the bank. Also, it is important to keep in mind that Connecticut’s economy will not always lead to state budget surpluses. If state government leaders think raising taxes is the right thing to do now, what will they think is the right thing to do when the state’s economy is no longer able to generate enough tax revenues to produce a surplus? Raise taxes by even more?
By now, many of you probably know that Governor Rell wants to in increase spending significantly for education, and to pay for it by raising the state income tax by 10 percent over the next two years. And, she wants to provide local property tax relief by imposing a local property tax cap that could be circumvented only under specific circumstances.
The majority Democrats countered by proposing a state budget that calls for even more state spending. If passed, the Democrats’ budget for next year would result in the single largest spending increase since the 1991 adoption of the state income tax – and since the enactment of the Constitutional spending cap that was supposed to protect us from runaway government spending. Despite that, the Democrats contend that their budget would result in lower state income tax bills for most filers. However, a closer look at their proposal shows that passing their budget would not save us money on the day-to-day taxes that we all pay.
For example, Connecticut residents do not pay sales tax on clothing and footwear costing less than $50. That’s a boon for everyone – especially for families. The Democrats’ budget calls for eliminating that exemption. Funerals are not only heartbreaking but expensive. Right now, the state’s six percent sales tax is not levied on property costing $2,500 or less that is sold by funeral homes and used in preparing and conducting a burial or cremation. The Democrats’ plan calls for eliminating that exemption, as well. Smokers already pay rather hefty state taxes on their cigarette purchases. The Democrats’ budget plan calls for increasing the per pack state tax from $1.51 to $2.
The Republicans’ “No Tax Increase” alternative budget does not call for raising these taxes, or any others. It does include some of Governor Rell’s proposed tax cuts such as eliminating the sales tax on electricity to commercial businesses, on energy efficient and weatherization products and on hybrid vehicles; immediately eliminating the “cliff” and phasing out the inheritance tax over five years; and capping the gross receipts tax on oil companies at a wholesale price of $1.75 per gallon.
The Republicans’ “No Tax Increase” alternative budget also calls for cutting some taxes, such as eliminating the Business Entity Tax for businesses with 50 or fewer employees; allowing recent college graduates to defer income taxes paid into a first-time homebuyers fund; increasing the income tax exemption to fifty percent for seniors’ pensions; and providing a tax credit for individuals and small businesses purchasing health insurance.
And, the Republicans’ “No Tax Increase” alternative budget even increases funding in some areas, such as state aid for local education. We also call for providing rate increases for Medicaid, providing a three percent COLA for the private service providers who care for our most vulnerable citizens; and providing an additional $15 million each year for the State Owned Property and College and Hospital PILOT grants as well as the Mashantucket Pequot grant.
Legislators and Governor Rell are now diligently working to negotiate a final budget package to be debated and voted on by the entire General Assembly before the legislative session ends on June 6th. You can be certain that I will be working with my colleagues to adopt a state budget that makes the most sense for Connecticut.
(To Editors: Column by Senator Len Fasano regarding the Republicans’ proposed “No Tax Increase” alternative state budget. Senator Fasano represents the 34th Senatorial District, which includes the communities of East Haven, North Haven and Wallingford. For further information, Senator Fasano’s press contact is Catherine Sarault, who can be reached at 860-240-8818, or via e-mail at Catherine.Sarault@cga.ct.gov. |
