The Democratic president of the Connecticut Senate says a state budget deal has been reached with Gov. Dannel P. Malloy, The Associated Press reports.
Sen. Donald Williams of Brooklyn said Wednesday the legislature’s budget- and tax-writing committees will vote Thursday on revisions to Malloy’s proposed two-year, $40 billion budget proposal.
The revised plan nixes some of Malloy’s planned tax increases, such as some affecting the boating and car industries.
The compromise still includes $2 billion in labor savings that have not yet been reached. Closed-door talks between unions and the Democratic Malloy administration are continuing.
The Republican minority unveiled their own budget on Tuesday that does not raise taxes to cover the projected $3.5 billion deficit.
Other highlights from the budget include:
— Sales tax exemptions are restored for boat services such as storage and repairs; car washes; haircuts; trade-ins for automobiles and discounts received from using coupons.
— The state’s highest personal income tax rate of 6.7 percent is imposed on more taxpayers.
— Assumes $2 billion in yet-to-be-resolved labor savings over two years.
— Sales tax increases from 6 percent to 6.35 percent for most transactions.
— Raises tax on cigarettes from $3 to $3.40 per pack and from 27.5 percent to 50 percent of wholesale price of other tobacco products. Alcohol tax is also increased.
— Restores annual sales-tax-free week.
— The maximum $500 property tax credit against the personal income tax is reduced to $300. Malloy had proposed its elimination and then requested the $300 figure.
— Sales tax exemptions would still be eliminated for clothing and footwear under $50, nonprescription drugs, pet grooming services, yoga studios, automotive storage, limousine services, automotive towing services, manicures and pedicures, airport valet parking services, cosmetic surgery services and spa services.
— The state gasoline and diesel taxes each increase by three cents per gallon.
— A flat 7 percent luxury tax would be imposed on the entire purchase of luxury goods. It would affect cars starting at $50,000, boats at $100,000, jewelry at $5,000 and clothing at $1,000.
— A so-called “Amazon tax” would be imposed for online purchases made through websites based in Connecticut. For example, if someone purchases an item on Amazon.com through a website based in the state, state sales tax must be collected. The proposal also affects other companies that do business through a website in the state.
— The budget adds $1.1 million in each year for Operation Fuel, a fuel-assistance program for the needy and $1 million in each year for domestic violence shelters.
— Malloy’s proposed 10 percent surcharge on the corporation tax is increased to 20 percent for income years 2012 and 2013.
— The budget closes an unnamed prison and expands estimated savings from offender management efforts, such as use of house arrest.
— Restores $4 million in each year in state education aid to needy Priority School Districts.
