State Senator Donald E. Williams, Jr.
Friday, August 7, 2009
Analysis: Governor Rell’s New Taxes and Fees Exceed Half a Billion Dollars
Senate President says despite differences, there is much common ground; income tax on wealthy the final hurdle
Senate President Donald E. Williams, Jr. (D-Brooklyn) said today that a new analysis of the tax and spending plans of Governor M. Jodi Rell and the Democratic legislature shows that the governor’s proposed tax and fee hikes are actually 34 percent higher than previously reported: she is seeking $524 million in new fees and taxes, and not just the $391 million in new taxes as has previously been reported.
Sen. Williams added that all of the $1 billion spending difference between Gov. Rell’s proposed $34.4 billion biennial budget and the Democrats’ proposed $35.4 billion biennial budget can be covered by the institution of a slightly more progressive income tax on Connecticut’s wealthiest residents — about $20 more per week for couples earning about $12,000 per week.
The analysis was completed this week by the non-partisan state Office of Fiscal Analysis (OFA) at the request of Senate Democrats, who asked OFA for a formatted summary of the latest budget proposals that were submitted by the governor and Democrats following the veto override of Senate Bill 1162, the consensus revenue forecasting bill.
“It has been widely reported for a week now that Governor Rell is seeking $391 million in new taxes while Democrats are seeking $1.8 billion. That’s not true,” Sen. Williams said. “The accurate comparison is that Democrats are seeking $1.77 billion in new fees and taxes — some on corporations and estates, but most all of them on Connecticut’s wealthiest citizens — and that Governor Rell is seeking over half a billion dollars in new fees and taxes. ”
“Still, I believe it’s important to note that despite all of the debate about how far apart the governor and Democrats are on a biennial budget, we do agree on about 97 percent of spending,” Sen. Williams added. “It’s that final $1 billion of spending on items like Life Star, public libraries, school-based health clinics, magnet school tuition and eyeglasses for the poor that remains a philosophical and fiscal sticking point. Democrats believe these services are too valuable to cut — especially in this economy — and we believe that in a state with the highest per-capita income in the nation, another $20 a week is not too much to ask of those who earn $600,000 per year.”
When all new revenue sources are combined, the OFA analysis shows Governor Rell is seeking $937 million in total new revenue to help balance the FY 2010-2011 biennial budget, while Democrats are seeking $1.8 billion.
Proposed new, non-tax and non-fee revenues include (for example) delaying an income tax exemption for single filers, the sale of various state assets, capping film and historic home credits, enhanced back-tax collections, and requiring estate taxes to be paid in 6 months rather than 9 months.
Governor Rell and Democrats do agree on other revenue sources, such as the use of federal stimulus dollars, the state budget reserve (“Rainy Day Fund”), Mashantucket Pequot and Mohegan funds, and some ‘securitization’ of future revenues.
Download PDFs of OFA’s analysis of Governor Rell’s latest budget proposal and the Democrats’ latest budget proposal.
| Governor Rell’s proposed taxes and fees, as of July 30, 2009 | FY '10 | FY '11 |
| 10 percent corporate surcharge | $87 million | $54 million |
| Economic nexus option | — | $10 million |
| Increase cigarette taxes from $2 to $3 a pack on 10/1/09 | $103.2 million | $124.2 million |
| Increase tobacco products tax | $1.9 million | $2.3 million |
| Alcoholic beverages tax increase by 10 percent | $3.6 million | $4.8 million |
| Increase various fees | $58.2 million | $51.2 million |
| Increase DEP fees | $8.8 million | $14.8 million |
| TOTAL | $524 MILLION | |
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Senator Williams’ |
Listing of Senator Williams’ recent press releases and a Press Kit with official head shots and bio. |
Press Aide Derek Slap |
