Lawmakers on cusp of budget vote

Teacher pension contributions, cigarette tax both expected to rise; passage expected today

Hartford — Connecticut lawmakers on Wednesday inched closer to voting on a long-awaited, bipartisan compromise state budget agreement, possibly ending a monthslong budget impasse.

The General Assembly’s Finance Revenue and Bonding Committee approved the two-year plan’s estimated revenues. The Senate was expected to begin debating the budget bill later in the evening, while the House of Representatives was scheduled to vote today.

“Truly,” said Rep. Chris Davis, R-Ellington, the committee’s top House Republican, “it was a compromise budget that I am comfortable with supporting and moving our state forward as we face, I think it’s Day 117 or 118 without a budget.”

Connecticut has been without a state budget in place since the new fiscal year began July 1. Democratic Gov. Dannel P. Malloy has run the state using his limited executive spending authority as legislators struggled to cover a $3.5 billion deficit in a roughly $40 billion, two-year budget. That’s meant cuts to social service programs and schools as well as confusion and angst among municipal leaders attempting to balance their own budgets.

One national credit rating agency is considering downgrading or assigning negative outlooks to more than 50 cities and towns because of the impasse.

Legislative leaders announced early Tuesday they had reached bipartisan agreement on the final details of a budget that was crafted without Malloy in the room. While aware the protracted process has taken a toll on the state, lawmakers contend the end product includes budgetary reforms and changes that will help it in the long run. Also, they said, the bipartisan nature of the budget deal is good for the state.

“This was a well-balanced compromise that will move this state forward,” Democratic House Speaker Joe Aresimowicz, of Berlin, said Tuesday night. “This has never happened, and we’re on the cusp of an historic event ... I think it will make our state a better place.”

It remains unclear whether Malloy will sign the package and whether lawmakers will need to garner enough votes to override a potential veto. The governor vetoed a previous Republican budget that passed with a handful of Democratic votes. He didn’t receive the details of this latest proposal until Wednesday afternoon.

Republican Sen. Len Suzio, of Meriden, said he was voting no. He contended the plan relies too heavily on higher taxes and fees. The list includes a 45-cent-per-pack increase in the cigarette tax, a 25-cent fee on ridesharing services such as Uber, a scaled-based earned income tax credit and increased fees for everything from land record filings to criminal history record checks.

“I thought we learned a lesson that we don’t balance the budget by imposing large tax increases on the people of Connecticut,” said Suzio, who counted 17 tax increases but only four tax breaks, such as exempting Social Security, pension and annuity income from the personal income tax.

Highlights of the budget

Following are some highlights of the bipartisan state budget agreement up for a vote Wednesday night in the Connecticut Senate:

Passport to Parks: The plan calls for increasing the biannual registration fee for passenger motor vehicles from $80 to $90. The additional $10 will be set aside to help fund state parks and forests. In return, registered Connecticut passenger vehicles would be allowed to park free at all state parks. Parking fees now vary but can be as high as $13 a day on weekends and holidays.

Property tax credit: The credit against the personal income tax for local property taxes would be narrowed to two select groups of people. In the budget, only the elderly and taxpayers with dependent children will be able to claim a credit of up to $200.

Cigarette tax: Under the budget, Connecticut’s cigarette tax would increase by 45 cents in the first year, to a total of $4.35 a pack. That would tie the state of New York’s tax for the highest state cigarette tax in the nation. Other parts of the country have higher overall cigarette taxes once local taxes are included.

Teacher pensions: Teachers would be required to pay 1 percent more of their income into the state’s teacher retirement fund. They currently pay 6 percent. The compromise maintains a 25 percent personal income tax exemption for teacher retirement pay. It previously was scheduled to increase to 50 percent.

Retirement taxes: Income from Social Security, certain pensions and annuities would be exempted from the personal income tax. This proposal would take effect in the second year of the two-year budget, costing the state about $16.1 million in lost revenue.

Uber fee: The budget calls for charging passengers of ride-hailing services, such as Uber and Lyft, a 25-cent-per-ride fee. Lawmakers had previously said that proposal was no longer in the budget, but it ultimately found its way into the final version.