Without Republican Gov. M. Jodi Rell’s signature, the $37.6 billion budget passed last week by the General Assembly will be official by the end of the day.
But the legislature’s work is hardly done.
The General Assembly will be back in special session Sept. 23-24 to finish crafting a bond package, as well as spelling out exactly how the state will implement the spending and policy changes included in the 702-page budget document.
The budget that goes into effect by default today includes one of the largest tax hikes in history.
Part of that tax increase includes an income tax hike on the state’s wealthiest citizens raising the rate to 6.5 percent for couples earning above $1 million and $500,000 for individuals. The decision to raise income taxes on the wealthiest residents was embraced by Rell at the last minute in an effort to bring the seven month budget battle to a close.
In an effort to balance the increase in the income tax, lawmakers embraced Rell’s proposal to decrease the amount levied through the estate tax, also known as the death tax. The estate tax will now only apply to estates worth more than $3.5 million, which is up from $2 million.
The budget may also reduce the sales tax from 6 percent to 5.5 percent if projections don’t fall below 1 percent. And it raises the cigarette tax from $2 to $3 per pack for smokers starting on Oct. 1.
Read our previous report, Budget Battle: Some Losers, Some Winners.