Democrats Reveal Spending, Tax Plan
by Christine Stuart | April 2, 2009 1:21 PM
Posted to State Capitol
(Updated 5:30 p.m.)The Democrat-controlled Appropriations and Finance Committees proposed a two-year budget Thursday that includes tax increases, borrowing, and spending cuts.
At a press conference this morning the Democratic co-chairmen of the two budget writing committees said their budget spends about $164 million less than Republican Gov. M. Jodi Rell’s $38.4 billion two-year proposal. It also cuts about 25 percent of managerial positions at the Department of Children and Families and reduces the amount of municipal aid cities and towns receive through the Mashantucket-Pequot grant by about $49 million over two years.
“I think we did a good job going through the governor’s budget line-by-line,” Rep. John Geragosian, D-New Britain, said.
In addition, Democrats said they want to borrow up to $500 million this year to help the state with the current fiscal year 2009 deficit and use the $1.4 billion rainy day fund for the deficits in 2010 and 2011. On the revenue side, the Democrats will try again to pass a “progressive” income tax starting at 6 percent for couples making $250,000 a year. The percentage jumps to 7 percent for those making over $500,000, 7.5 percent for those making over $750,000, and 7.95 percent for those making more than $1 million per year. Currently, all of those income brackets pay 5 percent.
Also, the income threshold for the $500 property tax credit residents currently receive would begin to disappear under the Democratic proposal. Currently if you are married and don’t make over $100,000 a year, then you receive the full $500 property tax credit, but Democrats want to change it so that by 2010 only those with an adjusted gross income under $25,125 would receive the full $500 tax credit. The credit drops on a sliding scale for incomes between $25,125 and $47,625. Those couples making more than $47,625 will no longer receive the credit.
Democrats would also impose a 30 percent tax on corporations over three years and suspend Connecticut’s popular tax-free week. They also plan on eliminating dozens of tax exemptions on various items from child car seats to car washes to media payroll services.
The various tax increases proposed by the Democrats are expected to generate about $3.25 billion over the next two years.
Sen. Toni Harp, D-New Haven, said the governor balanced her budget on the backs of low-income family and children by cutting health care programs 43 percent and education programs by 19 percent. She said that’s not how the Democrats are going to balance their budget.
Rep. Cameron Staples, D-New Haven, said Thursday’s proposal was consistent with how the state solved its budget deficits back in the early 1990s and during the 2002-03 recession. “It’s an honest budget and will allow us to move forward,” Staples said.
The budget pie chart presented by the Democrats Thursday said 27 percent of their budget is spending reductions, 37 percent tax increases, 17 percent federal stimulus dollars, and 19 percent from the rainy day fund.
The Democratic plan also restores the 23 commissions and agencies the governor cut in her February budget proposal and moves their budgets into the general fund.
Republicans said at a press conference Thursday afternoon that they were disappointed in the proposal.
“When all is said and done it will be the biggest tax increase in this state’s history,” Senate Minority Leader John McKinney, R-Southport, said. He said it’s not appropriate to reach into the pockets of Connecticut citizens without first looking at spending cuts
And he said he is “frightened” by the level of borrowing.
House Minority Leader Lawrence Cafero, R-Norwalk, said while everything is on the table, including taxes, the public demands the legislature to go through every line item first. He said the Democratic budget proposal just trims around the edges.
But Republicans said they would not be releasing their own alternative budget proposal this year unless Democrats refused them a seat at the table to work together on the budget.
Late this afternoon Gov. M. Jodi Rell reacted to the Democratic budget proposal saying that if it went through the House and the Senate as it was presented today “I would veto it.”
Despite having Democratic majorities in both chambers Rell doubted if the legislature would be able to override a vetoed based on the budget package presented Thursday morning. She said it was a budget package full of “phantom” cuts, which allowed the Democrats to retain state spending at its current level while the state tries to weather the “deepest budget deficit ever.”
She said the tax increases included in the budget proposal average about $1,000 for every individual in the state of Connecticut.
Robert Genuario, Rell’s budget secretary said their proposed tax increases would mean an individual making $35,000 a year would be paying $450 more per year in taxes. Married couples making $50,000 a year would see their taxes go up $500, he said. “This is not a tax increase targeted toward the wealthy,” Genuario said. “It increases taxes on every taxpayer in every income bracket.”
Rell said now that they gotten their own budget proposal together perhaps the two sides can sit down and get to work. Democratic lawmakers said that’s exactly what they want to do.
In a letter to Rell, Speaker of the House Chris Donovan and Senate President Donald Williams, said, “In an effort to keep momentum going at this crucial moment, we respectfully suggest that negotiations between the Appropriations and Finance Committee Chairs and Secretary Genuario begin immediately.”
This afternoon the Appropriations Committee voted 36 to 20on the spending side of the proposal mostly along party lines. Sen. Joan Hartley, D-Waterbury, Sen. Bob Duff, D-Norwalk, Rep. Linda Schofield, D-Simsbury, Sen. Gayle Slossberg, D-Milford, Rep. Terry Backer, D-Stratford, were the five Democrats to vote against the proposal.
The Finance, Revenue and Bonding Committee voted 38 to 18 on the tax package and only three Democrats crossed party lines to vote against it. Sen. Andrew McDonald, D-Stamford, Rep. Chris Perone, D-Norwalk, and Rep. Tim O’Brien, D-New Britain were the three Democrats that voted against this tax package .
Comments (9)
Posted by: Paul | April 2, 2009 2:00 PM
What is the point of producing a budget that only shows .4% reduction over Rell's? What a waste of time.
Posted by: City Hall Watch | April 2, 2009 5:30 PM
The message and solution from this hapless, thoughtless and irresponsible group of Dem "leaders" is to tax the hell out of us, as if we aren't taxed to hell already. If you're not in poverty, you will be or close to it under this scenario. It's no wonder they twiddled and diddled for three months before laying this goober on us. Any nitwit could have scribbled this plan on the back of napkin while drinking a scotch at the Temple Grill.
Why in god's sweet name would you raise taxes on people and companies when we're losing our jobs and our homes or barely hanging on to them? You are all cowards and lack the courage and good sense to trim back state government to any reasonable size. The cuts you propose are pitifully inadequate. Your moves will drive tax paying families and businesses right out of Connecticut. It's precisely why none of you have been able to produce any good paying jobs in a generation or more.
Meanwhile, this budget protects the status quo; protects the rich benefits; the massive overtime, the double dippers and all those who love their prescription drugs for $5 and lifetime of healthcare and once again screws the taxpayers. How the hell do you people live with yourselves? How do you actually wake up in the morning and believe you're doing what's right for Connecticut families? It's amazing you can find your way home. The tea party needs to go to Hartford - that's where taxation without representation resides.
Posted by: ctkeith | April 2, 2009 6:01 PM
Somehow I can't believe City Hall Watch has ever made over $100,000m in a year.
BTW,I'm in no danger of losing my home,my job or my health insurance but if it cost me another 500 to 1000 a year to keep the safety net in place for those who may I consider it my Christian duty to pay that without malice.
Posted by: muhammad | April 3, 2009 7:01 AM
We have to have faith in our elected officials. Our President Obama said,"We must sacrifice". With sacrifice , comes suffering. But this is temporary because with every hardship there is relief and with every difficulty there is ease. O ye of little faith, investments now are long term, let's be patient, thankful and put forth our efforts as citizens.
Posted by: Jay![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| April 3, 2009 10:40 AM
She said the tax increases included in the budget proposal average about $1,000 for every individual in the state of Connecticut.
Ok folks, READ THE PROPOSAL, if you make over 250,000 AGI then your taxes are going up. It should. As for the 95% of us who don't make that much, our taxes will not be touched. This is the same old scare tactics the Republicans use, "our taxes are going up." Use your eyes folks before you call names. READ, unless you are able to.
As for raising taxes on companies. ALL RIGHT. They have been getting the tax breaks for the last 20 years. They have been exempt from the tax burden and are NOT providing the jobs they promised. Those jobs are never materialized are are not going to. It was a white wash from the beginning. Now these same companies are getting bailouts and PAYING "BONUSES" in excess of what most of us will make in 20 years. Am I bitter. YOU BET. Companies should be GRATEFUL they can do business in the free market that they have here. Instead they milk the system and have do not a care for the rest of their workers. Ask why company loyalty is Zilch??? That is why. I say if they leave make them pay all those taxes they would have paid.
And who has had to pay for this lack of tax revenue from companies. You got it, they passed those tax bills on to the rest of us. Yes, we got jobs out of the deal, but we LOST in the deal because we have had to pay the tax bill that companies have said they needed to pay their large bonuses.
Is it time for a revolution in economic thinking? You Bet it is. Like many Americans I am sick and tired of paying my fair share in taxes while the rich and companies get all the breaks because they "invest". Well the truth is folks THEY DON'T INVEST THEY SAVE, THAT IS WHY THEY ARE RICH. And they did it on the backs of all us Americans who pay the bills for the fire, police, ambulance, roads, bridges, schools, and the list goes on.
Is this the best proposal, no. But is certainly a bit fairer than the Governor's plan which lacks imagination and fairness.
Posted by: Will | April 4, 2009 1:11 AM
The Democrat and Republican parties are one in the same. The governor continues to balance the state budget through massive bonding and borrowing, the Democrats propose cutting the budget through $500 million in additional borrowing.
When will they learn that the taxpayers, who have already stopped using their credit cards, want their representatives to live within their means? Sixteen percent of the state spending already goes to paying the interest on money Connecticut has borrowed in the past - mostly since John Rowland. Now these Demo-publicans both are in agreement to force our kids and grand-kids to pay for OUR generation's refusal to cut our bloated government circa 2009. That is, in the most obnoxious way, an insidious form of taxation without representation. Stem cells ought to be lined up on the lawn of the state capitol to protest "eeee-nuf already" -(and they would, too, if the stem cell's union leaders could figure out how to put batteries in the tiny megaphones.)
Posted by: City Hall Watch | April 5, 2009 9:11 AM
CT Keith:
You must be a state employee.
Muhammad: Good thoughts except for the one about having faith in our elected officials, especially those in charge of this budget. Among the new items to be taxed:
College Textbooks
Diapers
Bike Helmets
Stop smoking products
Massages
Mobile Homes
Solar Heating Panels
Tax, Tax Preperation
Baby car seats
Commercial Fishing Boats
Car Washes
Work Clothes
This is only a partial list. Please note the products and services they want to tax. Some of these work at cross purposes to alleged goals of the state. Taxing babies, car washes and the poor slobs that barely make a living as commercial fishermen; mobile home sales and of course, text books. Instead of making cuts, the pols in this story cynically just tax us even more so that we are forced to make cuts at our family level to cover their pathetic excuse at "leadership."
Posted by: Jay![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| April 5, 2009 10:04 AM
The one thing that most people can agree on is that we all should pay taxes. At least our fair share. I don't mind contributing to my state and local taxes because I know if I don't the police are not going to arrive when I need help. Or if my house catches on fire, I know that the fire department will arrive and attempt to save what they can. If the republicans had their way we may go back to the 19th century when fire departments were organized by insurance companies. The fire department would arrive and if it was not "your insurance company's" fire department then you would have to "contribute" to the the force on sight before they began to put the fire out. Does anybody want to go back to this type of a system????
Now, I am all in agreement that the Democratic proposal is not the best proposal. Be then again what proposal really is? However, compared to the Governor's program it, at least, tempers the burdens of the lowest income group. It attempts not to make their current economic hardships worse. The Governor only offers the same old program of cut cut cut. I don't see her cutting her driver and car? Now, for security reasons, I agree she should have a car and drive. But why not make her pay for it? Is this ridiculous to propose. Well it's no more ridiculous than to cut what few programs are out there for the indigent, poor children, the elderly, and the list goes on. These few programs help tremendously. Do some programs need fine tuning. Probably.
However, I do think that this is the problem with "balanced budgets". Its fine to have a balanced budget. But, nobody has one. Everybody carries debt, whether it be a credit card, mortgage, or a car payment. If you don't then you are in the 1% that is doing well. John Maynard Keynes showed us that "sometime" debts can pay for themselves. Impossible you say. Well, no if you increase the number of people paying taxes then revenues will also increase. If you have more people contributing to the tax burden, then you have more "income". So, lets get some of these stimulus programs going that were "shovel" ready, as the Guv said. And let's really have a progressive income tax. Connecticut's tax rates for income are among the lowest in the nation. The increase that is being proposed if only for those in higher income brackets. So before we start stating that the tax increases are going to cost everyone on average about $1000, remember folks that is an AVERAGE!!! Meaning they lopsided the average. The people who will pay, according to the budget, are those who have been benefiting from not paying their fair share in the first place.
Posted by: Jay![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| April 5, 2009 10:07 AM
The one thing that most people can agree on is that we all should pay taxes. At least our fair share. I don't mind contributing to my state and local taxes because I know if I don't the police are not going to arrive when I need help. Or if my house catches on fire, I know that the fire department will arrive and attempt to save what they can. If the republicans had their way we may go back to the 19th century when fire departments were organized by insurance companies. The fire department would arrive and if it was not "your insurance company's" fire department then you would have to "contribute" to the the force on sight before they began to put the fire out. Does anybody want to go back to this type of a system????
Now, I am all in agreement that the Democratic proposal is not the best proposal. Be then again what proposal really is? However, compared to the Governor's program it, at least, tempers the burdens of the lowest income group. It attempts not to make their current economic hardships worse. The Governor only offers the same old program of cut cut cut. I don't see her cutting her driver and car? Now, for security reasons, I agree she should have a car and drive. But why not make her pay for it? Is this ridiculous to propose. Well it's no more ridiculous than to cut what few programs are out there for the indigent, poor children, the elderly, and the list goes on. These few programs help tremendously. Do some programs need fine tuning. Probably.
However, I do think that this is the problem with "balanced budgets". Its fine to have a balanced budget. But, nobody has one. Everybody carries debt, whether it be a credit card, mortgage, or a car payment. If you don't then you are in the 1% that is doing well. John Maynard Keynes showed us that "sometime" debts can pay for themselves. Impossible you say. Well, no if you increase the number of people paying taxes then revenues will also increase. If you have more people contributing to the tax burden, then you have more "income". So, lets get some of these stimulus programs going that were "shovel" ready, as the Guv said. And let's really have a progressive income tax. Connecticut's tax rates for income are among the lowest in the nation. The increase that is being proposed if only for those in higher income brackets. So before we start stating that the tax increases are going to cost everyone on average about $1000, remember folks that is an AVERAGE!!! Meaning they lopsided the average. The people who will pay, according to the budget, are those who have been benefiting from not paying their fair share in the first place.
Sorry City hall, I am not sure what you mean by some tax increases. College Textbooks? most students I know pay the sales tax at the register. Baby car seats, I know I paid the sales tax when I purchased one. So I am not sure what taxes you mean.