Democratic budget: Savings & stability
HB7424, the Democratic state budget bill, passed the House on June 3. Contrary to misinformation-spewing borrow-and-spend-Republicans, the Democratic budget holds taxes flat, pays down long-term liabilities, maintains funding for towns and schools, achieves important savings, and builds on and accelerates renewed economic and fiscal dynamism.
Stabilizes and reforms growth-sapping fixed costs
- Saves $185 million in state employee and retiree health care over the next two years.
- Pays down $75 million of the historic cumulative deficit.
- Allocates $381 million to restructure the Teachers’ Retirement System, part of multi-year plan to pay down long-term unfunded liabilities BEFORE they come due.
- Moves Connecticut toward robust savings, placing it among the best states for budget reserves.
No income tax rate increase
First budget in four years without rate increase.
No sales tax rate increase, improves local retail competitiveness
- Eliminates the arbitrary sales tax disparity that disadvantaged local retailers versus online.
- Broadens our sales tax base without harming our existing brick & mortar retailers.
No reduction in funding for cities and town
- Keeps municipal funding flat over the next two years.
- Adjusts car tax formula to reflect year-over-year grand list changes.
Fully funds the Special Transportation Fund (STF)
- Brings the STF into balance over five years to repair our roads, bridges and highways.
- Fully implements the car sales tax into the fund by 2023.
Protects and supports Connecticut’s working families and vulnerable communities
- Rebuilds the economy from the “bottom up” by funding implementation of four-year phased minimum wage increase and paid family & medical leave.
- Includes $29M in funding over two years for wage increases for nursing home workers and expands eligibility for HUSKY A adults to 160 percent of the federal poverty level.
Increases funding for public education and workforce development
- Maintains the Educational Cost Sharing (ECS) formula and provides an additional $112M over two years.
- Includes a plan for Debt-Free Community College beginning in 2020 and adds $250,000 to the Minority Teacher Incentive Program.
- Strengthens the pipeline from Connecticut’s schools/colleges/universities to Connecticut’s growth industries (advanced manufacturing, biotechnology, others).
Supports Connecticut businesses
- Eliminates the $250 business entity tax — a tax that is mainly paid by small businesses.
- Phases-out the Capital Base tax under the Corporation Tax by Jan. 1, 2024.
Protects the environment and invests in clean energy
- Increases state’s purchases of zero-emission vehicles, incentivizes Connecticut residents’ purchases.
- Imposes a $0.10 tax on environmentally unfriendly plastic bags for two years, followed by an outright ban.
- Protects the state’s ratepayer funded energy efficiency and green bank programs.
Promotes health and wellness
- Raises the age for the consumption of tobacco products from 18 to 21 years old.
- Places a new 10 percent wholesale tax on e-cigarettes and a 40 cents per mL tax on “open” e-cigarettes to bring e-cigarettes closer in line to the state’s cigarette tax.
In all these and many other ways, the Democratic budget accelerates Connecticut’s return to economic and fiscal vitality.
The Ridgefield Democratic Town Committee provides this column.