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Tax Committee Finds Support For No Tax Increases

by | Apr 28, 2017 5:45am
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Posted to: State Budget, Taxes, State Capitol

Courtesy of CT-N

Rep. Jason Rojas, co-chairman of the Finance, Revenue, and Bonding Committee

HARTFORD, CT — After a week of partisan bickering and what looks like a two-year $4.7 billion budget deficit, it took less than 10 minutes for Democrats and Republicans to agree Thursday on a revenue package.

The modest revenue package doesn’t include any broad based tax increases, but it does increase marriage licenses from $30 to $50, reduce the earned income tax credit for the working poor, allow the Department of Revenue Services to waive penalties and interest payments for tax delinquents to increase collections by $60 million, and eliminate the film production tax credit for $4 million.

It also reduces taxes in some areas. For instance it eliminates the sales tax for coin-operated car washes, admission taxes to Harbor Yard and the Oakdale Theater, and lowers the insurance premium tax rate.

Other revenue initiatives approved Thursday by the committee would seek to phase out the $550 million hospital tax over a seven year period, new income tax exemptions on pensions and Social Security, reductions in the estate and gift tax and a $500 income tax credit for college graduates with degrees in science, technology, engineering, or math who agree to live in Connecticut after graduation.

The committee also approved a bill to study how to give Connecticut motorists discounts if the General Assembly agrees to move forward with tolls.

The committee approved the package without knowing that income tax receipts had fallen $450 million behind expectations.

“We haven’t heard,” Rep. Jason Rojas, D-East Hartford, said minutes before the meeting started Thursday.

He said the package they approved doesn’t include “any actual taxes in it,” but “it does reflect some of the proposals made by the governor and includes some additional proposals we felt we wanted to make in terms of a policy statement.”

The package raises less revenue than what Gov. Dannel P. Malloy proposed in his budget in February.

Sen. L. Scott Frantz, R-Greenwich, said the revenue package is a “step in the right direction.” He said the intent of the bill was to put them back on the track of a much stronger foundation with “much more appeal to the private sector.”

He said he supports the direction of the revenue package approved Thursday by the committee.

Rep. Chris Davis, R-East Windsor, the ranking Republican on the committee, said he believes the package they adopted Thursday can find bipartisan support moving forward.

“There are no tax increases in this budget,” Davis said. “Which is something Republicans have been arguing for for many months and many years.”

The Appropriations Committee failed to approve a spending plan earlier in the week so even with a revenue package, the legislature has offered only one half of a budget in response to the proposal Malloy put forward. 

“The revenue bill that passed in committee today is obviously not going to be the final package – there is much work still to do, and projections continue to change,” Malloy said Thursday in a statement. “But here’s what should be obvious: today’s committee vote confirms a clear and growing consensus between our administration, and legislative Democrats and Republicans that this year’s eventual budget should not and will not be driven by new revenue.”

House Speaker Joe Aresimowicz, D-Berlin, said the package is a positive step forward.

He remained optimistic that budget negotiations, which now largely move behind closed doors, will be bipartisan and fruitful.

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