Connecticut and most other states need to be cautious about their rapidly increasing reliance on cigarette and other volatile “sin” taxes, according to a new report from Pew Charitable Trusts.
Sources say Republican leaders agreed to raise taxes as part of the bipartisan budget framework announced Wednesday, with several of the new levies hitting what traditionally have been seen as Democratic constituencies, including the working poor and smokers.
Connecticut’s long-running budget drama began drawing to a close early Wednesday as the House of Representatives adopted a $40.3 billion, two-year package that largely restores deep cuts to social services and expands municipal aid while bolstering tax revenues by almost $2 billion.
Democratic legislators are using a two-stage, 50-cent increase in cigarette taxes to lessen — but not to eliminate — controversial income and data processing tax hikes, with the goal of passing a $40.3 billion, two-year state budget plan on Tuesday. The state’s chief business lobby quickly decried the changes as woefully inadequate.
Legislative leaders struck a tax deal with the administration of Gov. Dannel P. Malloy moments before midnight Saturday, setting the stage for action Monday on a biennium budget that would raise taxes on the wealthy and business, while funding property-tax relief and transportation.
Still needing a relatively small amount of revenue — tens of millions of dollars in a two-year budget of more than $40 billion — negotiators have struggled to find the right sources that will yield dollars without costing votes. A possible source under consideration is an old favorite, taxes on cigarettes.
As legislators and Gov. Dannel P. Malloy grapple with the unpleasant prospect of raising taxes, anti-smoking forces insist state officials are overlooking the only tax hike that yields huge benefits – and almost no public backlash.
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.