State Budget That Raises Taxes Is Wrong For Connecticut

September 2, 2009

Two months into this fiscal year, I wish I could have voted in favor of the long-awaited biennial state budget that came about as the end result of countless hours of hard work by Governor M. Jodi Rell, legislators, state budget officials and other state employees too numerous to name.

But, like every other Republican legislator and a handful of Democrats, I could not in good conscience vote for a budget that I believe will harm our state by costing us more jobs and, consequently, driving both businesses and families out of Connecticut. I, and many other Republican legislators, believe the General Assembly will be back at the State Capitol in a matter of months to repair the $37.6 billion biennial state budget that gained final legislative approval in the very early hours of September 1st.

While I appreciate Governor Rell’s efforts to mitigate the impact by using her authority to veto $8 million in budget line items, this tax and spend plan is not right for Connecticut.

The problem is that Connecticut citizens simply cannot afford this budget. They cannot afford to pay the higher fees for various state licenses – and they certainly cannot afford the consequences of the new 10% tax surcharge on larger businesses. Raising taxes on these employers in this economy – even temporarily as is called for by this budget – will increase the cost of goods and services purchased by their customers and, in some cases, result in layoffs.

Supporters of the budget point to plans to drop the sales tax from six percent to 5.5 percent on January 1st. But, state residents counting on this relief will be sorely disappointed if revenue collections fall too far below expectations; in that case, the budget calls for repealing this sales tax reduction.

Undoubtedly, there are some people reading this column who are not too upset about the fact that this budget calls for increasing taxes on Connecticut’s “millionaires” – that is, those with taxable incomes of $1 million for joint filers, $500,000 for single filers and $800,000 for heads of household. But everyone should be concerned. First, there are far fewer people in this tax bracket living in Connecticut than you might believe, and some of them provide much-needed jobs for state residents. I doubt that raising the threshold for the estate tax – commonly known as a death tax – from $2 million to $3.5 million will be viewed as a good trade-off. So, it makes sense to assume that some of these “millionaires” will pack their bags and leave. When they do, Connecticut will permanently lose the considerable taxes these people already pay. And when all of those revenues dry up, Democrats likely will choose to impose additional tax increases on the middle class.

As I have frequently said, Connecticut needs a state budget that provides necessary government programs and services at a cost that we can afford. As someone who runs a small business and helps to support a family, I know first-hand that we cannot afford this state budget. Connecticut’s families and business owners have learned how to do more with less during this recession and had every right to expect their General Assembly to pass a state budget that does the same.

I encourage anyone who has any questions or would like to further discuss the just adopted state budget to contact my legislative office in Hartford at 1-800-842-1421, or to e-mail me at [email protected]. I always look forward to hearing from you.