Featured in Politics

Democrats Consider Tax Increases

By NOREEN GILLESPIE
Published on 1/21/2005

Hartford — Leading Democrats in the legislature are turning their focus to potential tax increases as they consider how to plug a deep hole in the state budget.

Leaders say taxes on millionaires and gasoline, as well as tolls on the highways, are all under consideration. Some also want to look at revising sales and corporation taxes.

“Everything is on the table,” House Speaker James Amann, D-Milford, said. “But I also want to make it quite clear, as I've stated in the past, we're not going to tax for the sake of taxing.”

Both House and Senate Democrats on Thursday announced their priorities for the legislative session, about three weeks before Republican Gov. M. Jodi Rell is expected to release her budget plan. Ethics reform, education funding, campaign finance reform and stem cell research are among their top issues.

Estimates for the state deficit range from $800 million to $1.3 billion, leaving the Democrat-controlled legislature and Rell with tough choices. But so far, Republicans and Rell say the first task should be controlling state spending.

“She will oppose the efforts of those who prefer to place more burdens on the state's taxpayers instead of looking at spending cuts,” said the governor's spokesman, Dennis Schain. “The governor is focused on the spending side of the budget. She's not talking about tax increases.”

Though it faces a deficit, the state still is facing some expensive needs. One is transportation, as commuters grow increasingly frustrated with the condition of aging rail cars on Metro-North's New Haven line and congested roads in Fairfield County.

“Certainly the issue of electronic tolls, border tolls at some future time has to be on the table,” said Senate Majority Leader Martin Looney, D-New Haven.

While Looney wasn't yet endorsing those ideas, he said lawmakers would have to review revenue streams to seriously address the transportation problems.

Sen. John McKinney, R-Fairfield, said that while the state needed to look at other options such as bonding to pay for transportation improvements, he has not ruled out supporting a higher gasoline tax or taking other measures to pay for improvements.

A tax on the state's wealthiest citizens, the so-called millionaires' tax, was vetoed repeatedly during former Gov. John G. Rowland's administration. Senate President Pro Tem Donald E. Williams Jr., D-Killingly, said it was still an option, but not the only one.

“That's just one of the potential solutions. But again, we're not going to embrace any single proposition at this point,” he said.

Democrats also said they may consider eliminating some taxes to create a fairer tax system. One tax that Amann said he would support wiping from the books is a 6 percent tax on health club memberships, voted into place as the legislature negotiated a budget in 2003.

Republicans said they remained concerned that Democrats' proposals would exceed the state's constitutional spending cap. House Minority Leader Robert Ward, R-North Branford, said he wouldn't support any tax increases because spending had to be curtailed first.

Senate Minority Leader Louis DeLuca, R-Woodbury, said Senate Republicans haven't yet begun to consider spending cuts.

“We have to look at the governor's budget, and she has promised there would be some reductions in spending. As soon as that comes in, that's where we start,” he said.

Lawmakers will also look at other ways to raise revenue, such as trying to maximize the amount of funding the state is eligible to receive from the federal government for a variety of social service programs.

“There are savings we can find, and there's money we could bring in that aren't taxes,” said House Majority Leader Christopher Donovan, D-Meriden. “And some of those things can solve our problems, too.”

Democrats said their top priorities for the legislative session include expanding access to preschool programs, an initiative Rell also has discussed. Stem cell research is also an objective shared by Rell and Democrats, though they differ on the amount of money the state should invest.

Democrats also want a special board to review the formula the state uses to fund local schools, Williams said. Both cities and small towns say the current formula is unfair.

Ethics reform was also cited as a priority. Both Rell and Democrats have unveiled separate campaign finance and ethics reform plans. While Democrats favor public financing of campaigns, Rell has said she wants limits placed on political action committees and donations to political campaigns, among other measures.