Budget Package Moves Forward

Capitol Commentary
By State Rep. Mary Ann Carson

HARTFORD- On Thursday, April 2, the Legislature’s Appropriations Committee and Finance, Revenue and Bonding Committee approved respective spending and tax packages. The spending plan would require $3.3 billion in new state taxes during the next two years.

Because the state is facing an unprecedented fiscal crisis, there has been ongoing debate on the need to downsize state government. The budget proposal Governor M. Jodi Rell unveiled in February contained numerous consolidations of agencies and reduction of the state workforce as primary ways to close a fiscal shortfall that is currently projected at $9 billion for the next two fiscal years.

While there are small reductions made in certain accounts, the proposal approved last week also includes $55 million in new spending, and in fact, serious issues have been raised regarding provisions contained in the spending package. It would employ one time revenues from the Federal Stimulus Package and state’s Rainy Day Fund to cover ongoing expenses. Doing so would effectively build enormous holes in the state’s future budgets, already predicted to be in deficit by $3 billion to $4 billion per year in budgets for both Fiscal Years ‘12 and ‘13.

The following areas are also problematic because they are one-time gimmicks or potentially un-achieveable savings:

$355 million in unidentified savings from state employees;
$240 million in unidentified savings from Other Expenses throughout the budget;
$56 million in unidentified savings from “agency enhancement”;
$27 million in borrowing for Town Aid Road;
Delaying a $65 million HUSKY payment for one day after the end of the coming biennium.

In addition, the corresponding tax package raises serious issues. It would establish:

Tax increases on businesses through new corporate surcharges;
An income tax hike starting on incomes of $132,500;
Phasing out of property tax credits for middle income families

It would also remove nearly $80 million in sales tax exemptions on a multitude of items. A small sampling of the products and services that would be subject to sales tax under the proposal include: car washes; car seats; bicycle helmets; printed materials for use outside the State of Connecticut; amusement and recreation services; solar generating materials; cloth and fabrics used for home sewing needs; college textbooks; tax preparation services and products used for farming. Enacting sales taxes on these items is a cost that would ultimately be passed on to consumers.

Despite the governor’s call for downsizing state agencies to make services affordable to citizens, no such meaningful consolidation is contained in the budget package approved last week. It would instead force taxpayers to foot the bill because the Legislature refuses to make tough decisions in this regard.

In addition, early this year, majority party leaders promised that the budget package they put forth would be crafted in a bipartisan fashion. However, the minority party was almost entirely excluded from the process of crafting the proposal that was approved on a largely a party line vote.

Enacting the largest tax hikes in state history at a time when citizens can least afford them is irresponsible and will only serve to hurt more families throughout Connecticut and prolong the state’s recession. Balancing a budget by using an extraordinary amount of one-time revenues for ongoing expenses is simply not sound fiscal practice.

I am hopeful majority party leaders will follow through with their pledge to begin negotiations with the governor shortly to arrive at a compromise proposal. I look forward to providing updates on this process in the coming weeks.

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Editors Note: State Representative Mary Ann Carson represents Kent, New Fairfield, New Milford and Sherman in the Connecticut General Assembly.