Special session to iron out budget; new revenue projections show no need for tax increases

(June 7, 2007) Although they were unable to reach an agreement on a new, two-year state budget before the end of the regular session of the 2007 General Assembly, state lawmakers still approved some positive measures in energy, health care and brownfield redevelopment.

However, the governor has indicated that she will veto the health care bill due to the budget impasse that also held up progress on other key business priorities such as education reform and affordable housing.

The regular session ended at midnight Wednesday and lawmakers immediately went into special session. Legislators will be called back to Hartford once an agreement between the Rell administration and legislative leaders is finalized.

Perhaps most important, lawmakers took no action many bills that would have hurt Connecticut’s business climate and seriously weakened its job-creation and economic development efforts.

CBIA continues to urge policy-makers to refrain from proposals to increase spending and taxes. This week, new projections showed that the state is now expecting a budget surplus this year of nearly $1 billion.

During the regular session however, the House and Senate approved a Democratic tax package that would have increased taxes by $740 million but was vetoed by the governor. And at the end of the session, it was also heard that some were calling for an increase in the corporate income tax to help pay for new spending.

With revenues coming in so far ahead of projections, there is no need to increase any taxes this year. Lawmakers do need to address such key priorities this year as education, health care and housing, but they should do that in a responsible, affordable manner.

For more information, contact CBIA’s Bonnie Stewart at 860-244-1925 or stewartb@cbia.com.

CBIA Action Center

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