HARTFORD, Conn. (WTNH) — There’s more and more talk at the State Capitol about tax hikes. It’s coming as the state’s red ink problem continues to grow and lawmakers search for a way to stem the tide.
Making the $ 3 billion projected deficit over the next two years look even more bleak is word that the current year red ink problem has doubled in the past month to just over $130 million.
In the four weeks since Governor Malloy announced his state budget plan state lawmakers have been bombarded with cries that his proposal cuts too deep into the social safety net.
Because of all this a number of tax hike possibilities are now floating around the Capitol. Like increasing income tax rates on upper income residents, (which has already been done once by Malloy) or taxing capital gains at a higher rate, something Connecticut not done in 25 years, plus slapping another hefty increase on a pack cigarettes.
Representative Jeff Berger (D-Waterbury) is the new co-chairman of the tax writing Finance, Revenue and Bonding Committee, “It is part of a bigger discussion on potential revenue that we will discuss, obviously among ourselves in the committee process.”
The new Republican leadership in the Assembly sees all of these potential tax hikes as making a slow growth economy even slower. “We have to figure out what our priorities are for the state because whether we like to accept it or not, we have a limited amount of money,” said Rep. Themis Karides (R-Derby) the new House Minority Leader. Adds Sen. Rob Kane (R-Watertown), the Deputy Minority Leader in the Senate, “Every conversation we have in this building is about revenue; casinos, tolls, Sunday sales of alcohol, extending the hours of alcohol. It’s all about revenue, we never have a conversation about spending.”
But there is one thing that Governor Malloy proposed that many state lawmakers see as the ‘sugar-that-will-help-the-bad -medicine’ of tax hikes go down easier. That’s a cut in the ‘Sales Tax.’ It’s the one tax that’s paid every day by everyone, rich or poor. “We have been given a very good opportunity here as a legislature to look at the ‘Sales Tax’ and potentially reduce the ‘Sales Tax’ below 5 percent,” said Berger.
That could be what is emerging as a solution to the $ 3 billion deficit dilemma. A combination of tax hikes on higher income residents and maybe businesses as well with a cut in the ‘Sales Tax’ to make it easier to take.
It’s exactly what Governor Lowell Weicker did 25 years ago to get the ‘Income Tax’ on the books.