Some comments and analysis on Governor Rell’s threatened veto:
“On the eve of June 30, the end of the state’s fiscal year, the Governor is still threatening to veto a workable budget that will help our state get out of this economic mess,” said Sharon Palmer, President of AFT Connecticut. “It is inexcusable that she is putting us all at risk to protect millionaires and others who should be part of the solution.”
Palmer is referring to the Governor’s threat not to include a progressive income tax as part of her budget but to plug economic holes through drastic cuts in public services and public spending. Public services and public spending are vital to economic recovery, and that her veto puts our long-term economic health in peril.
“The Governor proposed cuts in healthcare for children, services for the blind and support for the elderly. Also on her chopping block are funds for community services, job training, road repair and public safety” said Bill Buhler, a pupil services specialist in the Department of Children and Families. “How can the Governor propose such harsh cuts, without first asking Connecticut’s top income earners to help balance the budget?”
The budget bill increases income taxes for those with taxable incomes over $500,000 for joint filers or over $265,000 for single filers. Connecticut’s middle-income and lower-income families currently pay much more of their income in state and local taxes than do the wealthiest families. After federal tax deductions, the wealthiest 1% of Connecticut’s families pay 4.5% of their income in state and local taxes. This is less than half the share of income paid in these taxes by the state’s middle-income families (9.3%) or low-income families (12.1%). It is worth noting that Governor Rell proposed an increase in the income tax in 2007 and urged her to adopt the current legislative proposal.
The budget proposal also would begin to scale back public subsidies to the entertainment industry through the “film tax credit” and increase cigarette taxes to help close the state revenue gap.
If Governor Rell vetoes the legislative budget proposal and no new budget is passed before the end of the fiscal year on June 30, many public and private service providers could be left with no guarantee of funding when the new budget year begins on July 1. After July 1, the Governor can suspend funding for services she deems to be “non-essential.”
“Health and human services for the state’s most vulnerable residents were, with a few exceptions, mostly protected in the budget approved by the House and Senate,” said Liza Andrews, Public Policy Specialist at the Connecticut Association of Nonprofits. “We encourage Governor Rell to sign this bill and ensure that private providers are properly funded immediately at the start of the fiscal year on July 1.”
“I know that Governor Rell cares about family values,” said Jeffrey Freiser, Executive Director of the Connecticut Housing Coalition. “But I don’t understand what kind of family values would lead her to impose greater hardship on struggling families, seniors and people with disabilities, in order to protect the wealthy from a tax increase.