Gov. Ned Lamont and Democratic legislative leaders agree to $43 billion budget that does not contain the income tax hike on the wealthy sought by progressives in the General Assembly.
Budget talks: A mansion tax is in, but a higher capital gains tax on the rich is out.
A new proposal by Democratic lawmakers to hike taxes on the capital gains of Connecticut’s wealthiest sets up a showdown with Gov. Ned Lamont.
An anticipated surge in state income tax receipts has bolstered Connecticut’s emergency reserves to nearly $900 million. But it remains unclear how much of that windfall is lasting — and how much is only an advance payment of funds Connecticut otherwise would receive in mid-April.
Connecticut’s finances were dealt a major blow Thursday when nonpartisan analysts downgraded projected income tax receipts by hundreds of millions of dollars for this fiscal year and next.
As the development of the next state budget enters its final stage this week, the main players in this drama might be further apart than at any previous time during Gov. Dannel P. Malloy’s administration.
The legislature’s tax-writing panel Wednesday will consider recommending an increase in income taxes on Connecticut’s wealthiest households, retroactive to Jan. 1, to help close the large deficit in the next budget, according to sources. The Democrat-controlled Finance, Revenue and Bonding Committee also will consider significantly extending the sales tax to new goods and services as part of a plan to overhaul non-education municipal aid and limit local car taxes.
Now that Gov. Dannel P. Malloy’s campaign pledge not to raise taxes is in the political rearview mirror, the Democratic governor’s political base is seeking to widen the tax debate in hopes of averting some painful spending cuts. Higher income-tax rates on the wealthy, restoration of the capital gains levy, an extra $1.50 per pack on cigarettes and expanding sales taxes on business are among the ideas circulating at the Capitol.
A deceptive stock market, weak job growth and federal sequestration combined to turn Gov. Dannel P. Malloy’s budgetary oasis into a mirage, according to several leading Connecticut economists.