The House and the Senate passed legislation Monday night that delays the scheduled estate tax reduction and eliminates the “cliffs” for residents who die with an estate worth more than $2 million.
The state budget passed more than three months ago had agreed to increase the threshold for the estate tax from $2 million to $3.5 million, but Monday’s legislation postponed those changes for two years.
The House voted 97 to 39 and the Senate voted 22 to 12 in favor of delaying the estate tax.
In the House, seven Democrats voted with the Republicans against the bill, while just one Democrat in the Senate, Sen. Andrew McDonald, D-Stamford, joined his Republican colleagues in voting against the delay.
Rep. Kim Fawcett, D-Fairfield, was one of the seven Democrats in the House to vote against the bill and it wasn’t an easy vote.
“I stressed until the very end,“ she said following the vote.
She said the estate tax has been an issue in Fairfield County for years. She said high property values in the county mean that even someone of modest means may die with an estate worth more than $2 million. She supported increasing the threshold for the tax to $3.5 million.
She said the fact that the General Assembly is reversing itself just three months after agreeing to increase the threshold “seems a little confusing and inconsistent.”
While she didn’t agree with the bulk of the bill, Fawcett said she approved of the bill’s ability to eliminate the “cliff” in the estate tax. The elimination of the cliff means the tax rate that will be applied will be on a graduated basis instead of being applied to the threshold value.
Rep. William Tong, D-Stamford, missed the vote due to traffic on the Merritt Parkway. But he said he was “proud the legislature fixed the estate tax cliff.”
Majority Leader Denise Merrill, D-Mansfield, said the legislature was there Monday to start “chipping away,” at the state budget deficit.
“We are here to begin to get a handle on that deficit,” Merrill said. “We found we can’t give a tax break to the most wealthy among us.”
The delay in the estate tax will raise about $5.9 million in 2010. It also transfers about $70.3 million in 2011 Rainy Day funds for use in 2010. In total, the bill increases revenue by $76.2 million.