Face the Facts: More on the state's push to get rid of so-called junk fees

There are about 800 or so random fees we pay for different things here in Connecticut. There's a push here in our state and in Washington to get rid of these so-called junk fees.

But that's just a smaller part of a much bigger tax reform plan that's in the works.

The man leading that charge is Mark Boughton. He is the commissioner of the Department of Revenue Services.

Mike Hydeck: So I read about a tax forum that you were a part of not too long ago. Dan Haar of CT Insider wrote about it. Is there really a fee if you want to become a nurse? It said in his article, you have to pay like $110 to become a nurse in Connecticut.

Mark Boughton: Yeah, it's $110 per year. There's not really a nexus to paying that fee and us providing any service, in other words, testing or professional development or anything like that. So it really is one of those hidden taxes that Governor Lamont has identified as a source of frustration for him. And so we've been working collectively to feret all of those out. The first step is to find exactly how many fees we have, and where are they, and then to be able to look through them and say, 'okay, some of them do make sense.' Some of them, we tie service, protect public goods, public safety, things like that. But others are simply there just to charge people a fee for being who they are. And then we worked our way through them. And the governor selected several that related to the healthcare industry that he thought were important. And I obviously agree with him 100% and proposed that we eliminate them. So this is just a first stab at it. It's just a little, little bite. And I think in the future years, you're gonna see even more and more of these kinds of fees go away.

Mike Hydeck: And you know, we need a lot of nurses right now. So anything that impedes getting more people in the healthcare field is not a good thing. Let's talk income taxes. Middle and lower-income families were supposed to start seeing the effect January 1. Where are we with that? Are they noticing it yet?

Mark Boughton: Oh, absolutely, I think roughly for about 30 to 35% of our filers, they'll have no income tax liability at all. So that's a good thing, by the way, the governor and myself are proud of that. And in addition to that, we have an historic increase in the Earned Income Tax Credit program. And of course, as you know, we topped off the discussion. It's a historic cut to the income tax in general. So all good stuff. And we really did this as a team approach: the governor, Office of Policy Management, as well as the legislature. And it was a bipartisan program that was passed by the General Assembly.

Mike Hydeck: So there has been a back and forth when it came to Earned Income Tax Credit and how much family should get off per child. Some Republicans wanted it in the thousands. They also wanted to include taking the tax off clothing for kids. Where does all that stand? Will that be amended? Or is it pretty much going to stay put as it is now?

Mark Boughton: Well, this year as we make adjustments to the second year of our state budget, I think the governor's message has been that we need to proceed with caution. That, you know, there are some economic headwinds nationally and internationally that we have to be concerned about. And we don't ever want to backtrack on the cuts that we already made. So I don't think you'll see anything more this year, as it relates to reduction in taxes. But I will say that, whether we're doing the sales tax free week that you mentioned, or whether we're doing the Earned Income Tax Credit, remember that went up to 40% this year. A tremendous opportunity for folks to be able to go to work. And that's the beauty of this program, it's an earned income tax credit. So you actually have to work to be able to claim it. And in addition to that, we now match the federal program, one of the highest in the country. So all good stuff by the General Assembly. And that takes the burden off of our working men and women of the state and working families.

Mike Hydeck: So for years, and you know, this as mayor, because you were looking for funding from the state as mayor of Danbury for years, that we have, as a state, been governing, when it comes to the budget process, from one crisis to the next. How do we borrow from Peter to pay Paul? And now though we've had a surplus for a few years, is there any way now to plan for the future? The governor says there is. So we don't end up underfunding schools or funding them flat or nonprofits haven't been able to keep up with the rate of inflation. Can we do all that and pay down pension debt in years to come because of the continued surplus we have?

Mark Boughton: Again, we've made historic steps in terms of pension debt that have never been done before by the state. So I definitely want to congratulate the governor on that. Look, there are long-term discussions going on about what tax policy will look like in the State of Connecticut. We issued our second of many tax incidence reports at the beginning of the year to benchmark to right set, level set, if you will, this discussion about, you know, we have to know where we are to know where we're going. And so that has spurred all kinds of conversations in the future. It's a difficult system of government we have in Connecticut. We have 169 cities and towns that love home rule and want to be on their own, but at the other hand, it's just not sustainable in providing core services. You know, as a former mayor, I know that it's not sustainable. So I think over the next half a dozen to a dozen years, we're gonna have to have long-term discussions about how we fund state government and local government, and who pays for what.