Christine Stuart photo
Democrats unveiled a spending plan Thursday that they said was “better, smarter, and fairer,” than Gov. M. Jodi Rell’s budget proposal.

It includes $31 million more in property tax relief, significant increases in Medicaid reimbursement rates for health care providers, and funds for economic growth initiatives that were cut in Rell’s budget. Democrats also hinted at tax cuts for the middle class with an increase in the property tax credit from $500 to $1,000 and a more progressive income tax structure that decreases the amount a couple making less than $150,000 would have to pay.

Altogether the spending increase is about 10.4 percent over this years budget.

See the proposed increases in health care spending and municipal spending.

The 10.4 percent spending increase caused Republicans to call the proposal irresponsible even though Rell’s budget represented an estimated 7 percent increase in spending.

A Democratic tax package to balance the budget will be discussed early next week, but Finance, Revenue and Bonding Co-Chairs Sen. Eileen Daily, D-Westbrook, and Rep. Cameron Staples, D-New Haven, said Thursday it will include a state earned income tax credit, a new Internet sales tax, progressive income tax, and an increase in the property tax credit.

Senate President Donald Williams, D-Brooklyn, said the governor’s budget raises taxes on those who can afford it least, while the Democratic plan offers tax cuts for middle class families.

Sen. David Cappiello, R-Danbury, said he was also opposed to the governor’s budget because it blew through the spending cap. He said he was afraid once Rell did that “the Democrats would not be able to contain themselves.”

“You’re increasing spending 10.4 percent and you argue you’re going to cut taxes in all these areas,” Rep. Kevin DelGobbo, R-Naugatuck, said. He said that’s like putting 50 cents in my left pocket and pulling a $1 out of my right pocket. “There’s no way we’ll be able to maintain this increase.”

Speaker James Amann, D-Milford said Rell’s budget set the wrong priorities and cheated the middle class. He said the Democrats plan gives the middle class the tax relief they deserve. “There’s no doubt she should be supporting this,” he said.

And the Democrats will need her support if they want to blow through the spending cap and use surplus money because both require a declaration from Rell. Amann said he didn’t think the spending cap declaration would be a hard fight because her own budget blew through that cap.