Balance Budget Without Raising Taxes

As our nation faces an unprecedented financial crisis that threatens to wipe out jobs, investments, businesses and retirement savings, Connecticut confronts its greatest budget deficit in recent history. Both the non-partisan Office of Fiscal Analysis and the Office of Policy and Management agree that the deficit for the fiscal year ending in June will be approximately $300 million and is likely to grow to more than $2 billion over the next two fiscal years.

At the same time, the wages of working families aren’t keeping up with expenses. The rising cost of healthcare, home heating fuel, gasoline, food and other services, coupled with our state’s high tax rates have created conditions that many are finding hard to weather. It is clear that government at all levels is faced with very difficult choices.

We need to adjust our spending habits — now.

I discussed the budget outlook and the options we have address this growing problem with Speaker Jim Amann on Fox61's Beyond the Headlines this past Sunday.

Find Energy Assistance and Tax Breaks

Winter will soon be here. Record energy prices are on everyone's mind - and for good reason. Consumers could be paying more than $5/gallon for their oil this year and the cost of natural gas and electricity is rising as well. Connecticut offers many programs to help pay heating bills, improve energy efficiency in your home, provide incentives to install renewable energy systems, and to defray the cost of purchasing hybrid vehicles.

Because finding the program that is right for you can be a time-consuming challenge, many state programs are underutilized. We have put together an interactive citizen's guide to help you quickly identify the tax breaks and energy assistance you need for your home or business. Click the site icon above to explore this guide.

Cut & Cap the Gas Tax

Here’s what Democrats do not want you to know: every time the price of gas goes up, it’s “good news” for the state treasury because of the Petroleum Gross Receipts Tax, which adds a 7% tax to the cost of gasoline in Connecticut.

So today, Representative Cafero and I wrote to every member of the legislature and asked them to sign a petition calling for a Special Session to cut and cap the Gross Receipts Tax, and require that such tax reduction be passed on to consumers.

We only need 6 more signatures in the Senate and a simple majority in the House to cut and cap the gas tax.

Connecticut motorists pay more than 50 cents/gallon in state gas taxes (more than half of which comes from the Gross Receipts Tax at today’s prices). That amounts to more than $7.50 every time you fill-up a 15-gallon fuel tank.

The Gross Receipts Tax was increased to pay for major transportation projects, but due to record gas prices, the state is taking in approximately $200 million in windfall revenues beyond what is needed for transportation. Today, nearly 60% of the revenue from this tax is being used to feed a bloated and growing state bureaucracy.

You can visit our home page to see if your senator has signed the petition to cut and cap the gas tax. If they haven’t, please contact them today and tell them that you don’t think Connecticut should have the highest gas tax in the region.

We can do something about gas prices

Last week we welcomed Governor Rell's support of the legislative Republicans' proposal to cap the state gross receipts tax on gasoline. Incredibly, in response the Democratic leadership said rising gas prices are a federal problem over which the state has no control.

Hiding behind the failures of our federal government is not leadership. Speaker Amann and Senate President Williams want you to believe that there is nothing the state can do to help reduce the price of gasoline. That's because they want to continue to spend the hundreds-of-millions of dollars in windfall profits the state is reaping from the growing energy crisis. Well, the last time I checked, neither President Bush nor the Democrat controlled Congress had control over our state gas taxes.

The truth that the Democrat leaders choose to ignore is, as state legislators, there is one factor contributing to the high price of gasoline that we can control, and that is the state gas tax. Currently, Connecticut gas taxes cost motorists more than 50 cents / gallon - one of the highest rates in the country. Since April, Republican legislators have been fighting to reduce that rate by cutting the gross receipts tax and permanently capping it. This will prevent the tax from increasing every time the price of oil goes up.

Democrat leaders questioned whether Governor Rell would support capping the gross receipts tax. Either they forgot or chose to ignore the fact that Governor Rell proposed capping the tax two years ago. Regardless, now they have no excuse. With Governor Rell's leadership and support, we are a step closer to providing a measure of relief to Connecticut families and businesses who are struggling to pay some of the highest gas prices in the nation. Legislative Democrats are the only impediment standing in the way of lower gas taxes in Connecticut.

Fiscal Discipline

With the April 15 tax filings in, the Office of Policy and Management revised last month’s surplus estimate downward 90% to just $15.7 million for FY08.

These revenue estimates underscore the need to act with the utmost caution and fiscal discipline as we meet over the next two weeks to negotiate the mid-term budget. In just one quarter, January to April, we have watched our surplus shrink by more than $240 million. If this trend continues, Connecticut will face a budget deficit in FY10 that could reach into the hundreds-of-millions of dollars. We need to look for efficiencies in spending and make smart decisions now to avoid that outcome.

It is imperative that the Democratic majority forgo its ambitious new spending proposals and all of its proposed tax increases, including the ill-conceived Delivery Services Tax. Connecticut residents are struggling with the rising costs of food, fuel, medicine and other necessities. A tax increase now would only further strain their lives and our economy.

Not the time for more taxes

Democratic leaders have, without apology or explanation, abandoned the promises they made to taxpayers and businesses just two short months ago and are now proposing significant tax increases. This is a striking reversal and one that could have a devastating effect on our economy.

In addition to a new “Delivery Services Tax” which would, for the first time, apply a 6% tax to the delivery charges of all goods transported in Connecticut including documents, products and groceries, a new Homestead Exemption will result in additional tax increases on Connecticut businesses by shifting the municipal tax burden to non-residential taxpayers.

Imposing new taxes on Connecticut businesses, especially at a time when a record number are closing their doors ,is terrible public policy. This legislature should be working with Connecticut businesses to help create and keep jobs in our state. Repealing the Business Entity Tax and expanding the Job Creation Tax Credit are two ways we can help.

Ethics Bill

Senate Republicans joined Governor Rell in calling for a nine-point ethics bill. These proposals will create a criminal penalty for public officials who fail to report a bribe, and give judges the power to revoke or reduce the pensions of corrupt public officials and state employees.

The Senate Republican Caucus stands ready to pass the nine-point proposal immediately, and we will continue to fight for additional ethics reforms including restrictions for state officials who lobby legislators, and the creation of a Standing Committee on Ethics.

We would prefer a bicameral standing committee to deal with ethical violations and acts of official misconduct, but short of reaching agreement across both legislative chambers, I again call on Senator Don Williams to join our caucus in establishing a Senate Standing Committee on Ethics.

A Senate Committee on Ethics can be created by a simple amendment to Senate rules and does not require the approval of either the House or Governor. According to the Office of Legislative Research, 41 state legislatures have designated committees to hear and investigate complaints alleging ethical or legislative rule violations committed by individual legislators.