Gov. M. Jodi Rell this morning unveiled a new budget plan that would exempt “small and medium-sized businesses” from her proposed 10 percent corporate surcharge and increases the income tax on high earners.
Rell’s latest proposal requires $520 million in spending cuts and proposes $710 million in new revenue, her office said.
“We need a state budget. It is time to move negotiations forward, not inch-by-inch but with great strides toward a meaningful agreement,” Rell said. “If the Democrats show flexibility on the spending side, I will be flexible on the tax side. Therefore, I am offering a true compromise with my fourth budget that should be voted on and signed into law by Sept. 1.”
Rell’s plan:
— cuts spending by $520 million;
— eliminates the inheritance tax;
— reduces the sales tax from 6 percent to 5.5 percent;
— increases the income tax to 6.5 percent on individuals earning $500,000 per year and joint filers earning $1 million or more; and
— increases the tax on cigarettes from 2 to 3 dollars.
In exchange, Rell wants Democrats to identify an additional $520 million in spending cuts.
According to Rell’s office, a “small” or “medium-sized” business has less than $100 million in federal adjusted revenue.
Rell had proposed the temporary 10-percent corporate surcharge on all businesses. The Democrats had initially proposed a larger surcharge, but have reduced their proposal to 10 percent in subsequent plans.
Â
Reader response:
“Governor Rell’s firm stance on significant cuts in state spending is absolutely necessary as state programs and agencies are very bloated compared to private enterprise performing similar tasks. Productive wage earners in the private sector along with businesses will continue leaving CT unless real efforts to make the state economically competitive to other states, especially in the South. It is inevitable that Pratt & Whitney and other CT companies competing on world markets will continue to move divisions out of CT if ANY new taxes or new burdensome regulations are imposed. Our company employed 80 or so people in the 1980’s, however we have had no choice since then to outsource much of our manufacturing with us continuing have same volume of business with less than 10 people. Our suppliers in Southern states can manufacture our products and make a decent profit at less than our direct costs of making the same products here in CT. Even my daughter and husband have moved out of CT due to high local and state taxes. The legislature is not understanding real world economics unless Governor Rell’s latest budget proposal is accepted.” — Jon Sibley, The Sibley Company
“The much larger problem is the cost of health care which can be solved by the insurance companies and the health care industry working together. We have the highest healthcare overhead cost of any major country in the world. A good start for the Government might be setting up billing standards for the medical and insurance industries. Worrying about corporate profits in a competitive industry is something the government should keep its nose out of.” — Leo Pellerin, Digiwize
“Sounds like a move in the right direction; however, is the phrase “new revenue” a secret code for higher taxes? Our elected officials have created our fiscal crisis by continuing to expand the size and role of government every year. Now is the time to make deep cuts. Now is time to turn over every stone no matter how small. Here are a couple of things to look at. How about eliminating the CTN channel? No one watches it. As I surfed channels the other day I stopped on CTN because I noticed a state employee giving a presentation on columns in the captiol building. Now that is a great way to spend our tax dollars! Has anyone looked at the cost of collecting revenues on CT Transit Buses? You know the ones that drive around 80% empty. Is it possible that by making the rides free, we can eliminate the cost of collecting those fares? Someone in the know believes that we spend as much to collect the revenus as we generate. By the way, wouldn’t “free” encourage more people to ride the buses. Do state officials, other than the Governor, really need drivers? How many jobs have been eliminated at the Capitol and Legislative Office Building? Let’s toss the politics out the window and make the painful cuts just like we have doen at our homes and businesses. The taxpayers are fed up and embarrassed that our elected officials will not do the job they were elected to do. By the way – the sooner you make the cuts the fewer will be needed.” — Curtiss Clemens Sr., Century 21 Clemens & Sons
“This old expression fits, ” Champaign taste on a beer budget”. Our government has not learned this simple fact. You can’t drive a car if you haven’t any fuel.
Car equals government, fuel equals-tax payers. Government can not continue to eat stake and lobsters when we are eating beans and do not have any fine foods to give. Cut governmnet wages, and benefits and parties. Turn off the A/C. Unscrew some light bulbs. Buy your own lunches. Drive your own car to work, we do. Start at the top and work down. Cut jobs, just like a real business.” — Bonnie
“I have read the comments, while I agree with some suggestions, I have asked the governor on her website for a town hall meeting! I am tired of the State Reps etc spending money and not doing anything for us! About the Bus situation, If the Bus had more convenient schedules and you were able to go to the places you need to go and we stopped depending on the cars then the revenues would increase! We need to increase mass transit which would increase jobs etc! Then there are the state employees who sit idle and do not do their jobs or help you when you call to straighten something or need information, nothing but a runaround sometimes. How about greening the Capitol and re using and recycle items etc. We also need to stop cutting items that are important to education and medical needs.” — Patricia Bruhn, Pebbles Graphics Â
