

No matter who wins the governor’s race, the elusive search for revenue to close a projected $4.6 billion two-year deficit will commence the next day, or as soon as the victor recovers from his hangover.
Pay no attention to the Stefanowski behind the curtain. Yes, that must have been where Bob Stefanowski was hiding during the first gubernatorial debate last Wednesday. Maybe he had a good reason.
To wit, the Republican nominee has not only ruled out new taxes but insists he can find a way to phase out the income tax, which accounts for nearly half of the state’s revenue. As one might expect from a candidate selling an unrealistic policy proposal, Stefanowski — beyond tired bromides about “zero-based budgeting” and routing out “waste, fraud and abuse” — refuses to specify where he will cut spending or make up the lost revenue.
Democratic nominee Ned Lamont isn’t right about much either, but he couldn’t be more correct when he asserts that Stefanowski’s plan would result in a massive property tax increase. So much for no new taxes, eh Bob?
To be fair, neither office-seeker — nor independent gubernatorial candidate Oz Griebel — has been terribly specific about how to balance the budget. As the co-chairs of the Connecticut Commission on Fiscal Stability and Economic Growth pointed out in a powerful op-ed Sunday in the Courant, the obstacles are numerous and realistic proposals from the candidates have been scarce.
During the fiscal crisis of the early 1990s, lawmakers had what they thought was a magic bullet to plug the gaping budget chasm — a vast untapped source of revenue called the state income tax. So at the urging of new Gov. Lowell Weicker, the dreaded tax was passed after much horse trading and with Lt. Gov. Eunice Groark casting the tie-breaking vote in the Senate. Weicker told us it would solve the state’s fiscal problems. We’re still waiting for that one.
That said, I don’t see any way out of this hideous mess without some sort of tax increase. As Bob Patricelli of Simsbury and Jim Smith of the aforementioned fiscal commission have pointed out, almost two-thirds of state spending goes to employee compensation, retiree pension payments and other post-employment benefits, as well as aid to municipalities and school districts.
Employee wages and benefits are untouchable for at least two-and-a-half years, thanks to a no-layoffs provision in the labor agreement signed in 2017 by Gov. Dannel Malloy and SEBAC. In other words, the state is essentially bound to spend at least the same on labor costs for the duration of the entire biennial budget the General Assembly passes and the new governor signs.
The only recourse for the incoming governor would be to ask labor once again to reopen its contracts or to declare an emergency and take the unions to court to break the agreement. The former is unlikely to work (layoff threats would be laughable) and the latter could drag through the courts for months — all the while the state continues to spill red ink.
Not that I’m rooting for it, but the more I think about it, the more I’m convinced the idea of a state property tax will gain currency if Lamont wins and Democrats hold onto both houses of the General Assembly. Even if the Republicans take all the prizes, they’re going to have to come up with a strategy to pay the bills or slash spending to unacceptable levels.
Let’s take a look at some neighboring states to see how they handle it. Rhode Island, whose towns are exceedingly dependent on property taxes, has no state real estate tax but a 4-percent cap on local levy increases. Ditto Massachusetts. And courtesy of Proposition 2½, the Bay State has had a 2.5-percent property-tax levy cap since 1982.
New York has a local cap but no statewide real estate tax, though individual counties do. Municipalities and school districts there have separate property taxing authority. Also unlike Connecticut and Massachusetts, New York has no car tax.
New Hampshire has no sales or personal income taxes, but lots of other taxes such as a state property tax enacted in 1999 to pay for education and address a funding crisis in New Hampshire schools. Vermont actually has a special property tax on second homeowners. It taxes out-staters at a special rate to fund local education, though the mill rate to fund other municipal spending remains the same.
Maybe the winner could resurrect a failed idea floated a year ago by the legislature’s Finance, Revenue, and Bonding Committee. Tucked inside the committee’s budget document was a revenue line allowing officials to “establish a state property tax on seasonal and recreational homes.”
The nonpartisan Office of Fiscal Analysis had estimated the extra 5 mills added to a property owner’s existing municipal taxes would generate $32 million for the state in each of its first two years.
It’s small potatoes, but that might be a tax all the candidates could agree on. It has much in common with Lamont’s proposal to impose tolls only on trucks, whose drivers coincidentally happen to be primarily out of state. Like truck tolls, the tax on part-time homeowners could be imposed on people who can’t vote against you. In a word, it’s the perfect tax.
It pains me to say it but there is no way to simply grow our way out of this. Some sort of broad-based tax increase in inevitable. But the blow could be softened if, as Griebel has wisely suggested, we could reduce or eliminate the business entity and estate taxes, and lighten up a little on the regulations that UConn’s Fred Carstensen has branded the “worst permitting regime in the country.”
Support authentic, locally owned and operated public service journalism!
Those measures might encourage the rich to stay, while telling the rest of the country that Connecticut’s finances are stable and the state is once again open for business. The alternative is death by a thousand cuts.
Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at CTDevilsAdvocate.com and is managing editor of The Berkshire Edge in Great Barrington, Mass. Follow him on Twitter @terrycowgill or email him at thenews@hotmail.com.
DISCLAIMER: The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.
More State Budget news

Lamont Signs The Budget
Alongside Democratic legislative leaders, Gov. Ned Lamont signed the $24 billion budget adjustment Monday that includes $600 million in tax relief. That’s more than they anticipated they would be able to offer Connecticut residents this Election year because revenue came in higher than expected, but it still creates about an $800 million deficit in 2024. …
Keep reading
ANALYSIS | It’s A Wrap: The Winners and Losers of the 2022 Session
It was a short legislative session, but the House and the Senate were able to move a lot of business this year, including the passage of a $24-billion budget with around $600 million in tax cuts.
Keep reading
Connecticut Acts To Help Its Lead-Poisoned Children
After decades of inertia, Connecticut is finally moving to help its thousands of lead-poisoned children and prevent thousands of other young children from being damaged by the widespread neurotoxin.
Keep reading
Bill Bolstering Contracting Oversight Board In Jeopardy After Lamont Administration Raises Concerns
It passed unanimously in the Senate, but a bill that would give the State Contracting Standards Board greater oversight over state contracting appeared stalled in the House Wednesday on the last day of session. “The governor and I have not talked about the bill,” House Speaker Matt Ritter said. “The commissioners have sent us a…
Keep reading
Senate Approves Tax Cuts, Sends $24B Budget to the Governor
The state Senate gave final approval late Tuesday to a $24 billion election year budget plan that includes around $600 million in tax relief while enabling the state to make an $3.5 billion payment on its unfunded pension debt. Senators voted 24-12 at around 10:30 p.m. to send the midterm budget adjustment to the desk…
Keep reading
House Green-Lights $24B Budget
On a party-line vote early Tuesday, the House passed a $24 billion budget adjustment package containing more than $600 million in tax cuts which Democrats heralded as “historic” and Republicans derided as temporary. Lawmakers voted 95 – 52 at around 12:20 a.m. to send the 673-page budget document to the Senate for consideration before the…
Keep reading
Budget Materials
The General Assembly is preparing to debate adjustments to the $24 billion state budget. Below are a few of the documents we’ve been provided as back-up materials. The budget, HB 5506. Town runs. Car tax impact on municipalities. Finance Committee Power Point.
Keep reading
Lawmakers May Vote for First Pay Increase in 20 Years
With legislative retirements mounting, lawmakers on both sides of the aisle were considering Monday raising the salaries of General Assembly members for the first time in more than two decades and indexing their pay in the future. During a morning press briefing, House Speaker Matt Ritter told reporters that funding for pay raises had been…
Keep reading
Amid Surging Revenue, House Prepares to Vote on Budget Adjustments
Connecticut’s House of Representatives was expected to vote Monday on a $24 billion budget adjustment package, buoyed by revised revenue predictions that exceeded expectations by more than $350 million. The revised consensus figures released Monday confirm the surge in revenues that enabled Gov. Ned Lamont and legislative Democrats to reach an agreement last week on…
Keep reading
Dems Detail Budget Deal With $500 Mil in Tax Cuts, Extension of Gas Tax Holiday
Legislative Democrats and Gov. Ned Lamont’s administration announced Wednesday the details of a $24.2 billion budget adjustment package, which they say provides around $500 million in tax relief including extending a gas tax holiday until December. Lamont and legislative leaders outlined the agreement during an afternoon press conference in the state Capitol building. Both chambers…
Keep reading
Health Care Workers Call for New Hires
After a record number of health care workers are expected to retire this year, health care staff called on Gov. Ned Lamont to commit to filling 1,000 vacant positions by August 1 of this year. A record 1,137 state workers who notified the state that they will retire this year comes at a moment of…
Keep reading
Senate Joins House And Votes To Give Raises, Bonuses To State Employees
The Senate gave final approval by a 22-13 vote on a plan to give unionized state workers a set of raises and bonuses. The plan, negotiated by Gov. Ned Lamont’s administration and a coalition of public sector labor unions, provides three years of 2.5% raises and step increases as well as a total of $3,500…
Keep reading
House Advances Labor Deal In Historic Vote
Lawmakers in Connecticut’s House of Representatives signed off on a plan to give state workers a set of raises and bonuses Thursday in a mostly partisan vote on a negotiated labor agreement. The House voted 96 to 52 in support of the deal with 1 Republican, Rep. Tom Delnicki of South Windsor, joining all Democrats…
Keep reading
Republicans Propose Last-Minute Tax Package
Legislative Republicans pitched a $1.2 billion tax relief plan Thursday which reduces state income, sales and gas taxes and proposes to join other states in suing the federal government to challenge restrictions on spending pandemic relief funds. House and Senate Republicans announced the plan during a state Capitol press conference Thursday morning. It cuts the…
Keep reading
The Budget Battle Begins To Take Shape
Tax collections have improved and pushed Connecticut’s budget surplus to $4 billion, but the state budget still relies heavily on federal funding and without it the state would end up running a “sizeable operating deficit.” The Office of Policy and Management told state Comptroller Natalie Braswell Wednesday that if not for the use of the…
Keep reading
Ritter: Time Is Running Short For Budget Agreement
The legislature will have a difficult time approving a state budget before the end of its session in two weeks if lawmakers and Gov. Ned Lamont do not reach an agreement in the next 48 hours, House Speaker Matt Ritter told reporters Wednesday. During a morning press briefing, Ritter said the legislative schedule was looking…
Keep reading