Following the House’s vote earlier in the day, Senate lawmakers voted 19-17 Wednesday night to approve a $40.29 billion budget for the coming two fiscal years.
Some revenue provisions in the budget, which Gov. Dannel P. Malloy on Thursday morning indicated he would sign, include:
- Higher taxes on corporations, in the form of a unitary tax, the extension of a 20 percent surcharge on corporate income that was set to expire, a new tax on computer and data processing services.
- Limitations on the extent to which corporations and hospitals can reduce their tax liabilities, in the form of caps on loss carry forwards and tax credits.
- A 6 percent tax on the gross receipts of state-licensed and Medicare-certified ambulatory surgical centers.
- A higher income tax for residents and couples earnings more than $250,000 and $500,000, respectively, and for trust and estates.
- A reduction in the property credit homeowners can claim against their state income taxes.
- An increase in the $3.40-per-pack cigarette tax, which will grow by 25 cents in October and by another 25 cents in July 2016.
- An elimination of sales tax exemptions for clothing and footwear costing less than $50, which was set to take effect next month, and for non-metered parking in certain lots.
- A sales and use tax for car wash services.
The budget also legalizes Keno, subject to an agreement with the state’s casino operating tribes, caps motor-vehicle mill rates, allows liquor stores to stay open one hour later.
During a press conference Thursday, Malloy stressed that he had submitted a budget in January that kept with his promise of not raising taxes. But he said he intends to sign the budget, and not veto it.
“My Jan. 18 budget was balanced without raising taxes,” Malloy said. “The legislature and governor are charged with working together. We worked together to the best of our ability.”
Malloy highlighted increased transportation funding, which he said would total $2.8 billion over the next five years, as well as the diversion of some sales tax revenue to municipalities for property tax reform.
Malloy said he has spoken with representatives of General Electric, Aetna and Travelers that had warned of the impact of higher corporate taxes on their businesses.
He said he told them “that we’re making real advancement on property taxes.”
Here is the Office of Legislative Research’s analysis of the latest budget bill.
