This past fall, Connecticut legislators enacted a bill that would cut the state’s sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. from 6% to 5.5% unless revenues were more than 1% lower than they projected. They will be, so Connecticut Gov. M. Jodi Rell (pictured right with actor John Travolta on the set of Old Dogs, a terrible movie made possible by the state’s wasteful film taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. credit program) announced:
[T]he death knell for the tax cut was not heard until Tuesday, when Gov. M. Jodi Rell’s budget chief announced that the never-implemented cut was history, based on the state comptroller’s certification in recent weeks that tax collections had fallen more than 1 percent behind.
As a result, Robert Genuario, head of Rell’s budget office, said that a projected state deficit of nearly $470 million would be reduced by $129.5 million — the amount that would have remained in taxpayers’ pockets had the tax cut taken effect as enacted.
But that still leaves the state facing a deficit of $337 million for the current fiscal year, so Rell is asking the Democratic-controlled legislature for cuts in a variety of programs, including a 3 percent cut in aid to cities and towns.
Connecticut also increased income taxes earlier this year and already has some of the worst property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es in the nation. AP says the current Connecticut two-year budget is $37.6 billion, still a 5% increase over the previous two-year budget of $35.8 billion. I’d like to think that the state has done its share of tax increases and now it’s the turn of spending cuts.Share