A history-making week in more ways than one in Connecticut as record revenue continues to pour into our state in the way of tax receipts and, for the short term, federal pandemic funds.
We can now expect one of the biggest series of tax cuts in history.
NBC Connecticut's Mike Hydeck spoke with Senate President Pro Tempore Martin Looney (D-New Haven) about what the tax cuts could mean for state residents.
Looney also addresses why a number of legislators in both chambers won't be returning next session.
Mike Hydeck: "So the majority of Democrats are, of course, very proud of this budget for sure. When the latest news came out with substantially even more tax revenue, was there more room for bigger tax breaks for taxpayers? Do you think?"
Martin Looney: "I think that what we did was exactly the right balance between meeting the unmet needs that we have been struggling with for the last 14 years since the Great Recession began, where each budget cycle we were in crisis with big deficits, we always had to shave something off essential programs that we would prefer to have funded. So I think this time, we had the right balance between a certain amount of tax cuts, over $600 million, and catch-up spending, as I would call it, in many social service areas."
Mike Hydeck: "One of those social service areas that was in agreement between the Republicans and the Democrats was mental health when it comes to kids across the board. Did we spend enough there do you think?"
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Martin Looney: "I think we did. We had a major initiative on mental health, especially for children because we know that the pandemic has taken a tremendous toll on children with isolation, alienation, exacerbation of conditions like depression, other things. We know that so many children are suffering and finding inadequate treatments. We know in many cases, private providers just are not available for many children. That's why we wanted to make sure that we increased resources that would be available within schools, to help children with mental health needs, and also to try to help them get more care outside of school to find the skilled and licensed and certified private providers outside of school as well."
Mike Hydeck: "Also one of the biggest, most immediate reforms that was going to give all of us some relief was eliminating the state gas tax at 25 cents per gallon, now through December 1. Can I ask why diesel fuel was not included, which is now a whopping $6.19 a gallon."
Martin Looney: "There was no consensus on the diesel issue. We wanted to primarily assist Connecticut's drivers, the people who use their cars every single day for commuting purposes and the like. And we realized that July 1, we have no idea what the wholesale price of gas would be. And it would potentially be higher than it was on April 1 when we instituted the 25-cent suspension on that gas tax. So that's why we continue that to December 1."
Mike Hydeck: "Is taking action on diesel fuel out of the question in the future right now?"
Martin Looney: "Oh, no, nothing's out of the question. I think we will certainly look at what continuing patterns and trends might be. And we will monitor that and look at it as as we go forward."
Mike Hydeck: "Getting more and more people back to work means having affordable childcare. Should the child tax credit have been more than just one year? We have a lot of temporary tax breaks here. That's one that maybe could have been extended, do you think, or no?"
Martin Looney: "Well, the administration insisted on having it be one year. I certainly will be supporting extending it and making it a permanent part of our tax structure."
Mike Hydeck: "So as we also know, during this pandemic, it was a financial hardship for many businesses, over 600 restaurants closed across our state. And to try to make sure all of the people who were out of work were able to pay their bills, we borrowed money from the federal government to pay for unemployment benefits. Now business owners have to pay that back. Right now, that's $493, around $500 million in debt, the state is. This budget put $40 million toward that. How was that figured? How was $40 million figured and could it have been more to try to help our businesses get back on their feet?"
Martin Looney: "Well, we looked at the variety of needs that the state had and determined that that figure would be appropriate. Had we put a whole lot more in there, there were other things we would not have been able to do."
Mike Hydeck: "Again, same thing. In the future, is there a possibility that this could have more of an infusion of cash from the state or we're going to leave it there until the next budget cycle?"
Martin Looney: "Well, I think when we come back in next session in January, we'll be looking at all of these things. And if we continue to have a booming, robust surplus projected, we can again look at the unemployment fund and perhaps address it again."
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Mike Hydeck: "So now, the $600 million in tax relief is on the table. It's expected to be, you know, a done deal. Republicans, though, called for $1.2 billion in taxes, including lowering the income tax. Senate Minority Leader Kevin Kelly said that $1.2 billion was a responsible use of the money, said it didn't hurt the budget, and it returned more money to taxpayers. What are your thoughts on that?"
Martin Looney: "Well, my thoughts are that we achieved the right balance. If we had put more into tax relief, we wouldn't have been able to do as much on the social service side, or wouldn't have been able to reserve as much for putting money toward the pension funds that have been, again, underfunded for so long. You know, if you look at this historically, it was the Republican governors John Rowland and Jodi Rell, who consistently refused to put money into the pension funds, even when times were good."
Mike Hydeck: "So a number of your colleagues in both chambers are not seeking reelection. What are you hearing from some of them about why they're leaving? And what does this say about the balance of Democrats and Republicans moving forward? It's somewhere around 20 people who are retiring, I think."
Martin Looney: "I think it may be more than that in the aggregate when you actually get to the House and Senate. And well, part of it is that some people are feeling that they have done what they hoped to do when they were serving, but others, I think, felt that other competing concerns in their life, in terms of being able to sustain legislative service financially, when it is becoming increasingly a full-time job for very much part-time pay, despite the fact that a raise is going into effect next year for the first time and over 20 years. That legislative increase for those who are elected in 2022, and going forward, if you look at it, adjusted for inflation, it's still less than the last raise was worth when it went into effect more than 20 years ago."
Mike Hydeck: "So will we see you in the next session in January?"
Martin Looney: "I expect to be there."