House Democrats

The Democratic Budget for Connecticut

After eight months of negotiations, a balanced budget is finally in place. We were confronted this year with the largest deficit our state has ever faced — $8.5 billion. The global economic crisis caused state revenue to fall by over 30%, while record high unemployment also meant that more citizens needed help.

Despite the challenge, we reached a compromise that will get the state through difficult times by cutting $3 billion in spending and avoided raising taxes except for a slight increase in income tax for the highest earners. For example, a family earning $1 million will now pay about $12 a week more in taxes.

This budget puts Connecticut on the road to economic recovery by preserving essential programs for our neediest citizens, maintaining municipal aid to prevent property tax increases, and continuing our commitment to education and job growth.

TAXES

Taxes were increased (from 5% to 6.5%) on taxable income over $1 million for joint filers; $800,000 for Head of Households; and $500,000 for single filers. A family earning $1 million will now pay about $12 a week more in taxes.
The Sales Tax will be reduced by .5% depending on how well the economy performs.
Cigarette taxes went up from $2 to $3 a pack.
Corporations with yearly revenue over $100 million will pay a 10% surcharge on the amount of taxes they pay (i.e., their rate isn’t increased by 10%, they just pay 10% more in taxes for two years).
Estate taxes were reduced. First, fewer estates are subject to the tax because the trigger value was increased from $2 to $3.5 million. Second, the cliffs were fixed so that once an estate is subject to the tax, the tax doesn’t reach back to the first dollar. Third, the tax rates were reduced by 25%.

STATE EMPLOYEE CONTRIBUTIONS

Approximately 4,800 employees left state service through a retirement incentive program.
Employees gave up 7 days of pay with unpaid “furlough” days.
Employees agreed to pay more for their health care.
Overall, the value of state employee concessions was about $700 million in each year.

INVESTMENT IN YOUTH

$30 million in new federal dollars for employment programs.
16 year-olds will no longer be treated as adults in criminal court and will receive more appropriate services to turn their lives around.
Students will not be able to drop out of school until they are 17 as opposed to the current age of 16. Keeping them in school longer ensures a better future.

PRESERVED PROGRAMS
The Governor had proposed severely reducing or eliminating funding for certain services which were rejected. Among the programs and services we preserved were:

Internet and other resources for public libraries.
Lifestar helicopter services.
Funding to prevent rail and bus fare increases.
Jobs First job training.
Public financing for elections.
Office of the Child Advocate.
Health Care Advocate.
The utility rate payer watchdog (aka the “consumer counsel”).
Supportive housing and community services for the mentally ill.
Funding for group homes.
Funding for acute psychiatric care.
Funding for scores of cultural, historic, or arts organizations.

CHANGES TO PROGRAMS

Education:

The Open Choice Program is expanded.
Towns receive level funding for education.

Health Care:

SAGA clients will be covered by Medicaid, which brings more federal dollars to Connecticut.
Medicaid patients will need approval before receiving certain dental services.
The state will aggressively go after those defrauding publicly-funded medical programs through a state “false claims act” that gives a financial incentive for people to report such fraud.
Clients on the state-funded home care program will have to pay slightly more for services.
Individuals who are on both Medicare and Medicaid will be placed in a managed care setting.

GOVERNMENT EFFICIENCIES

Many state offices, boards, and commissions were merged or eliminated.

All agencies received less money and will be required to make do with less.