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Tax Hike on the Horizon

Governor says there might be no more cuts

Thursday, Jul 30, 2009 | Updated 12:14 PM EST

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Governor M. Jodi Rell said constituents may have to take a tax hike.

After stating that she did not want to raise taxes unless there was no other option, Gov. M. Jodi Rell said Wednesday the state might have reached a point where there’s not much more to cut, so she might institute tax boosts.

Rell’s administration and state Democratic leaders have been looking at ways to cut spending as the state faces a deficit of more than $8.5 billion for the 2010-11 fiscal years, but they have been at an impasse.

The state has been operating on executive order since the end of the fiscal year.

Both sides have presented budget cost-cutting measures. Rell's most recent budget proposal included cutting the state's allocation to municipal libraries by $5.4 million.

This spring, Democrats proposed hiking the budget beyond the current 5 percent maximum on households earning $250,000 or more, the Stamford Advocate reports. Other plans include eliminating the Department of Motor Vehicles and redistributing its duties.

“The fundamental difference is that Democrats believe we can have a tax on those making over $500,000 and that can make up the difference and we’d be pretty much done,” House Speaker Christopher Donovan, a Meriden Democrat, told Bloomberg. “The governor is looking for more in terms of cuts that we find unacceptable.”

Another plan could reorganize the Department of Children and Families and creating a new oversight committee.

Democrats will release their new budget proposal Thursday.