As the state’s budget stalemate continues, Gov. M. Jodi Rell is presenting the Democratic legislative leaders a bit of an olive branch: she’s putting the so-called “millionaire's tax” back on the table.
At the same time, she is asking the Legislature to cut the state's sales tax from 6 percent to 5.5 percent.
Rell had refused to raise taxes on those making more than $500,000 per year (or $1 million for those filing jointly), but has now agreed to raise that to 6.5 percent. She is also hiking the per-pack cigarette tax from $2 to $3. Her proposed changes could bring in $710 million in new revenue.
Of course, coming to a solution is not that easy. She is demanding that Democrats cut an additional $520 million – the same amount she cut by reducing the sales tax and other corporate surcharges.
She insists that the budget should be voted on and signed into law by Sept. 1.
“My budget’s bottom line makes government more affordable – not just for the next two years,” Rell said in a statement. "Frankly, I would prefer not to offer a budget plan like this. ... However, I have shown flexibility when it comes to revenue and a willingness to compromise in an effort to end this budget impasse. It is long overdue for Democrats to do the same when it comes to making real, meaningful spending cuts."
Democrats appear receptive to Rell’s latest proposal.
“As we’re crunching the numbers, we’ll be looking for cuts and there will be cuts,” ,House Speaker Christopher Donovan said. “I can’t say where we are right now but there will be additional cuts.”
Democrats had planned on voting on their version of a budget Thursday but put it off while they review the governor’s budget.