The governor has provided several deficit mitigation options to legislative leadership to review to deal with the nearly $208 million current year deficit.
In a letter to the leaders, Gov. Dannel Malloy said his administration is providing the legislature with a “menu of choices” for their consideration, including expenditure reductions and revenue options.
His office said they total almost $303 million, so legislators could consider selecting among them to balance the budget.
Or, his office said, legislators could take all of the options to put the budget almost $95 million in projected surplus.
The proposal includes increasing the cigarette tax by 25 cents, tripling the tax on cigars to $1.50, and eliminating the minimum bottle pricing on alcoholic beverages. It also proposes raising the hotel tax from 15 to 17 percent, upping the restaurant tax from 6.5 to 7 percent, and taxing nonprescription drugs.
The option that sticks out the most in the proposal is increasing the sales tax from 6.35 to 6.5 percent or 6.9 percent. The former would raise $33.4 million this fiscal year and $98.2 the following year. The latter would raise an additional $81.1 million this fiscal year and $237.2 million the following year.
Another option includes allowing grocery stores to sell wine.
On the spending cut side, options include closing the Old State House and reducing municipal aid funding by $100 million over two years
“I understand that these options will be almost universally objectionable, and that there is little appetite among you or your members for making such adjustments to your budget,” Malloy wrote. “In fact, I agree these changes are difficult and that in better economic times, with a balanced budget, none of us would put them on the table for consideration. However, I have a clear statutory obligation to provide you with a plan to mitigate the deficit. Moreover, I believe we do a disservice to the public when we defer necessary steps and fail to take decisive action, ultimately making the cost to taxpayers and damage to government services even more severe.”
The governor was required to provide a deficit mitigation plan to the General Assembly by Dec. 31.
“I have received the governor’s deficit mitigation options and am reviewing the details. At first look, a nearly $200 million tax increase is a nonstarter for our state," Senate Republican President Pro Tempore Len Fasano, R-North Haven, said in a statement. "Connecticut is suffering deficits due to a sluggish economy created by years of historic tax increases passed by Gov. Malloy and Democrat lawmakers without any thought for how these taxes would hurt our state in the long run. I have serious concerns about many aspects of the governor’s menu of options, but I will continue to review the full list of choices in detail and look forward to meeting with fellow legislators to outline an appropriate course of action.”