Fasano Signs on to Balanced Budget Proposal Aimed at Cutting Gas Taxes and Providing Relief for Small Businesses

Hartford, CT – State Senator Leonard Fasano (R-North Haven) today joined other House and Senate Republican leaders in introducing a balanced budget proposal that would cut state gas taxes, provide tax incentives to small businesses and reduce state spending by more than $160 million.

The plan includes several proposals Fasano has advocated for throughout this year’s legislative session.  It calls for a two-year phase out of the Business Entity Tax, an expansion of the job creation tax credit, and the elimination of the .5% increase in the gross receipts tax on gasoline scheduled for July 1st.  In an effort to save money and slow the growth of government, more than 11,000 eligible state workers will be offered an optional early retirement plan.

Democratic leaders in the General Assembly have said they do not plan to make major adjustments to the 2008-2009 budget despite the economic downturn and recent drops in revenue projections.  Senator Fasano said there is a better course of action.

“With the cost of gasoline approaching $4 per gallon, food prices rising, and our overall economy worsening, this is not the time to sit idly by as a state legislature,” said Senator Fasano.  “We need to make smart decisions now to avoid deficits in coming years.  Our Republican budget proposal will provide immediate relief at the gas pump, reduce government spending and provide tax incentives to small businesses who create new jobs.”

The Republican budget is balanced and below the state spending cap.  It is currently the only budget proposal before the General Assembly that offers significant and lasting tax cuts and funding for the two major criminal justice initiatives adopted this year. The Republican budget also addresses shortfalls in the Special Transportation Fund (STF) and makes necessary transfers in order to keep the STF in balance.

The Republican budget calls for spending $16.839 billion, as opposed to $17.073 billion under the existing 2008-2009 state budget.  Highlights of the budget proposal include:

• Cuts gas prices by 10 cents per gallon through a summer state tax moratorium and cancels the scheduled July 1st gross receipts tax increase of .5 percent on July 1st.
  
• Phases out the annual $250 Business Entity Tax over two years.
  
• Phases out of the estate tax “cliff” over two years.
  
• Offers an early retirement incentive program to eligible state employees.
  
• Allows eligible seniors to receive care in their homes, instead of in nursing homes.  
  
• Funds recently adopted criminal justice reforms.
  
• Re-establishes the early reading success program.
  
• Provides one percent cost of living adjustment for private non-profit social service providers and nursing homes.

• Includes additional $5 million for Town Aid Road grant program.
  
• Increases funding for Vo-Ag programs by $1 million.