By Len Suzio
If you detest the new tax burden that will be imposed by the Legislature if they pass toll legislation, you will absolutely hate Governor Lamont’s proposed budget. Although I did not vote for Governor Lamont, I had hoped with his business background he would bring some commonsense budgeting to Hartford. But the Governor’s proposed budget dispelled me of that delusion.
Facing a $3.7 billion projected deficit for the biennium budget, the Governor disdained spending cuts and chose to balance the budget with record-breaking tax increases and cost shifting, with only a smattering of spending cuts (which may turn out to be unrealistic because they require state employee union approval which is not likely).
As I reviewed the Office of Fiscal Analysis Synopsis of the Governor’s proposed budget, I discovered 57 tax increases! That’s right, 57 tax increases are in the proposed budget. The increases come in various shapes and sizes. Seniors and retired folks will be disappointed to learn that the Governor has proposed eliminating the scheduled changes to exemption thresholds that would have reduced seniors state income tax burden. Likewise, the Governor proposed eliminating the increased income exemptions for retired teachers.
This column has a limited number of words, so I can’t list all 57 tax increases, but I will highlight a few here. This short list is taken from the complete list in the Office of Fiscal Analysis Synopsis of the Governor’s proposed budget:
■Repeal expansion of the Income Tax exemption for Social Security income
■Repeal new income tax exemption for pension and annuity income exemption
■Permanently cap at 25% teachers pension exemption from state income tax
■Expand the sales tax to include legal and accounting services
■Expand the sales tax to include veterinary services
■Expand the sales tax to include real estate services (i.e. real estate commissions)
■Repeal the sales tax exemption on non-prescription drugs
■Repeal the sales tax exemption for newspapers and magazines
■Eliminate the sales tax-free week
■Repeal the sales tax exemption for vehicular trade-ins
■New 10¢ surcharge on plastic bags
■New 1.5¢ per ounce sugar-sweetened beverages
■Maintain the Health Care provider tax on hospitals
Some of the foregoing are “nickels and dimes” taxes, but others are serious tax increases. For example, the elimination of the sales tax exemption on automobile trade-ins can mean more than $1,000 of extra sales tax to be paid by someone purchasing a car. And anyone selling their home also will see a big tax imposed on their real estate commissions fee (a house sold for $250,000 will likely result in almost $1,000 sales tax on the real estate commission).
The foregoing tax increases do not include the proposed paid-sick-leave “payroll tax” that will take an extra 0.5% from your paycheck. If you are making $60,000 per year that will be another $300 you will pay in taxes annually. Double-income couples will pay even more.
Based on my review of the OFA synopsis and adding in the paid-sick-leave payroll tax the average annual tax burden of taxpayers would be increased by almost $1,000.
Aside from the 57 tax increases and the paid sick leave payroll tax, the tolls will be another added burden to Connecticut families. So, add that to your annual tax burden proposed by Governor Lamont.
But that’s not the end of the story. When we look at the Governor’s proposed spending “cuts” it becomes evident that much of the spending cuts are really cost shifting that will be passed on to taxpayers indirectly. For example, the Governor has proposed shifting 25% of the normal cost of teachers retirement obligations to cities and towns. This means Meriden, Cheshire, and Middlefield will be forced to pick up that “spending cut” that is really another cost-shifting shell game gimmick. And who do you think will pay that added cost?
Another example is the Governor’s interception of automobile taxes intended to be transferred to the Special Transportation Fund. For the biennium that will save about $267 million in the General Fund, but it accelerates the forecasted bankruptcy of the Special Transportation Fund – which is why the Governor says we need tolls!
If the foregoing isn’t enough to depress Connecticut taxpayers, the stunning truth is that if all these tax increases are passed, we still are projected to be staring at deficits as far as the eye can see two years from now.
The day of reckoning for decades of foolish tax-and-spend politics in Connecticut is at hand. Taxpayers are at the breaking point and the Governor’s proposed budget only adds to the unsustainable taxpayer burden.
Elections have consequences and the consequences for Connecticut are indeed dire. The state is broke and the only answer from the Governor and the Legislature is to spend more and tax more. Wait till taxpayers find out!
Len Suzio is a former state senator.