HARTFORD, CT — Democratic legislative leaders said they’re getting close to a budget deal that will raise the sales tax, but not as much as 6.99 percent.
House Speaker Joe Aresimowicz, whose caucus released a budget at the end of June that increased the sales tax from 6.35 percent to 6.99 percent, said Thursday that he thinks it will be higher than 6.35 percent, but lower than 6.99 percent.
The 1 percent local sales tax option for food and beverages is also still on the table.
Senate President Martin Looney, D-New Haven, said there’s also a good chance the new budget proposal will include an expansion of the sales tax base. That means it would adjust the amount of sales tax that’s exempt on certain items or services.
As for the sales tax increase, Looney said it will likely have to be part of the final package in order for them to reach a budget agreement.
Senate Republican President Len Fasano, R-North Haven, said he’s not surprised Democrats would put forward another tax increase.
“It doesn’t surprise me that all Democrat leaders can offer for a solution is to significantly raise taxes on the middle class after boxing us in by approving the governor’s labor deal,” Fasano said. “Their strategy of addressing our budget problems one year at a time is why we are in the situation we face today.”
Democratic leaders who were unable to get a budget over the finish line before the June 7 adjournment said they will release details of their latest proposal next week.
“The goal is to put another revised budget on the table for negotiations,” Aresimowicz said.
That budget will be released publicly next week.
He said it will be a 70/30 budget.
“Seventy percent of it will be things that we can live with that move forward an agenda that we’re standing by and 30 percent will be things we don’t necessarily like,” Aresimowicz said.
He acknowledged the lack of a two-year budget is tough on schools and municipalities now, but it would have been tougher to allow the governor’s budget proposal to move forward, Aresimowicz said.
“It’s all bad, but it would have been worse in June,” Aresimowicz said.
He said the $400 million the governor is asking municipalities to contribute to teacher’s retirement costs would have been more devastating than the proposals they’re currently debating.
“As far as the House Democratic caucus is concerned the whole TRB issue is yet to be determined,” Aresimowicz said about the teacher retirement costs the towns are being asked to pick up under the governor’s budget. “We’re continuing to have discussions. It’s not clear.”
The issues being debated are the same ones that were up for debate in February.
The distribution of municipal aid and Education Cost Sharing grants, the proposal to have the towns contribute to teacher’s retirement cost, and the issue of whether hospitals should pay property taxes in the communities they are located were all significant pillars of Malloy’s budget.
“Those issues or finding money to replace those issues if they’re not to be enacted continue to be three of the major challenges that we face,” Looney said. “We are working on variants of those proposals.”
Looney said they are continue to look for additional spending cuts too.
But Aresimowicz said “there’s no way you can cut your way out.”
He said it’s always been a combination of labor concessions, spending cuts, and revenue to offset some of the decreases in municipal aid.
“At some point there needs to be some agreement on some revenues,” Looney said.
Looney said he would prefer an increase in the income tax on the wealthy, but the last two tax increases on that population didn’t bring in the estimated amount.
Following an unrelated event, Gov. Dannel P. Malloy said he’s been critical of leading any discussion with revenue.
That being said he’s acknowledged “revenue adjustments may play a role,” Malloy said.
As for the teacher retirement costs, Malloy said it’s important they begin to change the dynamic because Connecticut cannot continue carrying all of the weight of retirement programs.
