

Whenever anyone mentions increasing taxes in the state of Connecticut — or just about anyplace else in the United States — most people insist we should cut spending first.
I tend to share that view. After all, starting in 1991 with the adoption of the state’s first income tax, and twice since 2011, the General Assembly has passed, and governors have signed, the largest tax increases in state history. And it has hardly righted our fiscal ship.
It’s interesting to note that national polls have consistently shown that large majorities of respondents favor spending cuts generally. But when pollsters narrow their questions to include cuts in specific programs, support for spending reductions quickly evaporates.
In other words, as long as it’s a faceless bureaucrat in some department I’ve never heard of, send him home. But roads, bridges, police, firefighters, schools — they’re our people and we need them. Keep your hands off, I say. Aside from the obvious NIMBY implications, the problem with that line of thinking is that even in your own backyard, the cuts from the state are coming and the low-hanging fruit will be first on the chopping block.
The current labor agreement with most of the state employee unions forbids layoffs until 2021 and benefits are safe until 2027, so cashiering thousands of state workers or slashing their benefits is simply off the table for awhile. Even when those measures become an option, the state’s unfunded liabilities — pensions and other post-employment benefits — will remain high for the foreseeable future, crowding out spending on other more popular programs.
Among the most popular items in the state budget is aid to municipalities and school districts. Connecticut residents love those programs because they fund local infrastructure replacements, for example, as well as community colleges, youth service bureaus, school construction and operations. There are truckloads of money at stake here. Education spending alone, for example, accounts for about a quarter of the state’s $42 billion biennial budget.
And it gets worse. Connecticut is one of the few states — if not the only state — in the nation that has sole responsibility for funding the pensions of its public school teachers. Both Gov. Ned Lamont and his predecessor, Dannel Malloy, have tried, unsuccessfully so far, to offload a portion of that responsibility to school districts themselves. The current unfunded liability stands at $13.2 billion and counting. Lamont’s most recent effort would have required towns to contribute 25% of teacher pension costs next year, with that percentage rising steadily until it hits 100 percent by 2022. Mark my words: eventually it will happen and all the state’s municipalities will need to be prepared.
In my last column on teacher pensions and how to pay for them, I mentioned the possibility of the state giving Connecticut’s 169 towns and cities the tools to raise revenues on their own — beyond real estate and personal property taxes, and fees from services such as building permits and the like.
I can already hear conservatives objecting to this idea but it would not be mandatory. Towns that don’t care for the concept of a local sales tax wouldn’t be obligated to enact one. Connecticut would not have to reinvent the wheel here. We’re one of the few states that does not allow any government entity except the state itself to place a sales tax on purchases. Even the Connecticut Conference of Municipalities has recommended it and two years ago it was proposed by Senate President Marty Looney, who rightly emphasized at the time that its purpose would not be “to grow the size of municipal government, but rather to enable our towns to diversify their local revenue base.”
The system works pretty well in Massachusetts, where there is no broad-based option for a local sales tax. Instead, since 2009 towns have had the option of imposing a 0.75% tax on restaurant meals, which is returned to towns by the state Department of Revenue. A similar option enables towns to tax hotel rooms. Those taxes have been quite a boon to many Bay State towns and cities and have helped to mitigate upward pressure on property taxes and bolster their rainy-day funds.
And since it was legalized in Massachusetts in 2016, recreational marijuana sales have been taxable at the local level at rates as high as 3%. This has created a windfall for towns that host cannabis retailers.
In the Berkshire County town of Great Barrington (population 7,000), for example, in the first six months of this year alone, the town raked in almost $1 million in combined taxes on $10.3 million in sales at Theory Wellness, the town’s only cannabis retailer. Oh, and by the way, a lot of the cars I see in Theory’s parking lot have those baby-blue Connecticut plates.
So are targeted local-option sales-tax add-ons the solution for Connecticut? The Republican American newspaper asked that same question in an extensive piece last Sunday. Some municipal officials liked the idea but others, mainly retailers, were nervous about the prospect.
Support authentic, locally owned and operated public service journalism!
I share their concern but I’m also worried that when the hammer comes down and state aid is dramatically reduced and billions in teacher pension obligations are dumped back on municipalities, mill rates could double or triple. That would be far worse than a modest local sales tax on meals, hotel rooms and weed (once we come to our senses and legalize it), especially when much of those aforementioned taxes would be paid by out-of-towners.
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