With no budget deal in sight between legislative Democrats and Democratic Gov. Ned Lamont, some lawmakers are trying to make their case for raising taxes.
Last week, Senate President Martin Looney, D-New Haven, and Sen. John Fonfara, D-Hartford, held a virtual press conference to promote their plan to create an Equity Investment Fund that’s funded by a capital gains tax. The tax is estimated to raise $262 million in the fiscal year starting July 1, 2022.
That’s in addition to a new tax on the wealthy that would focus on individuals with adjusted gross incomes of a half a million dollars or more.
“We can’t pretend that things are normal when we have the equivalent of a four or five-alarm fire going on in many of our communities,” Looney said.
He said for the past 30 years he’s been trying to create more progressivity in Connecticut’s tax code since the income tax was first enacted in 1991.
“We believe that 2021 is the next year to make a move toward greater progressivity in our tax code,” Looney said. He said President Joe Biden is trying to do this at the federal level with an income tax increase on those making more than $400,000 per year.
However, Lamont has continued to dismiss any tax increase that impacts the wealthy.
Senate Republican Leader Kevin Kelly said instead he seems intent on supporting taxes that would impact the lower and middle class the most. Like a mileage tax and the Transportation Climate Initiative, a cap and invest program that would raise gas taxes by 5 cents per gallon, according to the Lamont administration.
“Even as we see historic levels of federal funding coming to Connecticut and a surplus this year, Democrats cannot help themselves,” Kelly has said. “They want even more. They think Connecticut residents don’t pay enough already. Some of these tax increases are regressive and will hurt those most struggling today.”
Lamont himself is not on board with any more tax increases, but it’s unclear what may happen in negotiations with the legislature. The legislature and the governor are expected to start budget negotiations next week.
Lamont has said he doesn’t support the Finance, Revenue and Bonding package, which includes a tax on those making more than $500,000 a year and a 2% capital gains surcharge.
“Respond to that with just more taxes is not the way I think we should be going as a state,” Lamont has said.
Lamont, who is weighing a re-election bid, has said he wouldn’t support a budget even if it passed the House and the Senate if it included the tax increase.
By the end of the week Democratic lawmakers are expected to make their own proposal for how to spend about $2.9 billion in federal funds headed to Connecticut.
