PPT - Westport Republicans

A Budget Presentation
State Senator Toni Boucher
State Representative John Frey
May 3, 2011
Legislature’s Budget Process
(Governor Proposes, Legislature Decides)
Connecticut Has a Biennial Budget
Governor Submits Budget to Legislature in Odd Numbered Years
Appropriations Committee Holds Hearings for Each State Agency
Subcommittees Review Budget Information
Subcommittees Report to the Appropriations Chairmen
Appropriations Chairmen Prepare Budget Recommendations
Budget Report Submitted to Full Appropriations Committee and
Voted Upon
Finance Committee Produces Revenue Estimates and Capital
Budget Bills
Appropriations and Finance Bills Submitted to House and Senate
Alternative Budgets May Be Presented by Minority Party
Legislative Leaders and Governor Negotiate Budget
House and Senate Debate and Adopt
Governor’s Signature or Veto (Returned to Legislature)
State Government Has Grown Too Large
Connecticut’s Population vs. Real State Government Expenditures
(Source OFA & Census)
State Government Has Grown Too Large
Connecticut’s Employment Growth vs. State Employment Growth
(Source U.S. Census Bureau & CT Department of Labor)
Budget Deficit Projections
FY 2011- FY 2013 General Fund
(Source OPM)
Where Does The Money Come From?
FY 2011 Revenue
(Source: OFA)
Where Does Your Money Go?
Major Spending Components for FY 2011
(Source: OFA)
The High Cost of Living and
Doing Business in Connecticut
• Nation’s highest total state and local taxes ($7,007) per capita
• 2nd highest unfunded pension liability ($4,500) per capita
• 4th highest state debt ($7,882) per capita
• 45 states have fewer health insurance mandates
• 2nd highest state gas taxes
• Voted Least Business Friendly Legislature
by Expansion Management magazine
• 5th highest cost of doing business,
according to the Milken Institute
• 2nd highest electricity cost (after Hawaii)
• Last Tax Freedom Day in the nation (May 2)
• 9.0% unemployment, higher than the national average
• 100,000 jobs lost during the recession
Sources where not specified: US Census Bureau, the Internal Revenue Service, CT Dept. of Revenue Services, CT Dept. of Labor, Secretary of the State,
The Tax Foundation, Education Sector, Tax Foundation & U.S. Dept. of Energy.
Closing The Budget Gap:
What Makes Up Governor Malloy’s Proposed Solution?
FY 2012 (General Fund)
(Source: OFA)
Governor Malloy’s Budget Proposal:
Largest Tax Increase In State History
Income tax increase across the board
Reduce property tax credit
Increase sales tax to 6.35%
Increase gas & diesel taxes to 28¢/gallon
Increase taxes on: hotel rooms, cigarettes,
alcohol, insurance companies, real estate sales
20% corporation tax surcharge
Tax corporations for income earned in other states
Expand the death tax
Increase motor vehicle registration fees
Increase driver’s license fee
Create $25 driver’s license renewal fee
Property tax on boats and aircraft
New taxes on:
$3.8 billion
Revenue Increases
pet grooming
automotive storage
“Amazon tax”
packing and crating
automobile road services and towing
limousine services
labor on small aircraft repair
clothing and footwear under $50
non-prescription drugs
manicures and pedicures
airport valet parking
cosmetic surgery
cloth and fabric
luxury goods
hazardous waste removal
car rental
admissions and dues
electricity generation
waste-to-energy facilities
The Republican Alternative:
The “No Tax Increase” Budget
• No Tax Increases. Period.
• Reduces spending by $1.5 Billion from the Governor’s plan
• Preserve aid to cities and towns at current levels
• No borrowing for day-to-day operations
• Provides real efficiencies and workforce reductions
• Fully restores the property tax credit for homeowners
• Redirects Connecticut’s budget toward a more
sustainable future
The “No Tax Increase” Budget
Workforce Restructuring
Real Consolidations of Agencies and Job Functions
 Consolidates 36 state agencies into 9, and eliminates 383 government positions
 Saves $18.9 million in FY12 and $27.6 million in FY13
Middle-Management Reductions
 Eliminate 1,380 duplicative managerial positions over the biennium
 Increase the ratio of manager-to-workers from 1:6 to 1:12
• Consistent with the recommendations of the Bipartisan Commission on
Enhancing Agency Outcomes
• Savings of $112 million in FY12 and $138 million in FY13
 Eliminate Vacant Positions
• Savings of $10.8 million over both years of the biennium
 Implement a Hard Hiring Freeze
 Eliminate Longevity Payments
 Labor Concessions
• Per the Governor’s plan, $2 billion in
savings over two years
The “No Tax Increase” Budget
Common Sense Reforms
Mandate Relief/Local Options
• Binding arbitration reform
• Riverview Hospital
• Raise threshold for prevailing
wage requirements
• DMV – Registrations
• Eliminate Race to the Top requirements
• DOC – Prisoner Health Care
• Delay in-school suspension requirements
• DSS – Program Intake
& Applications
• Limit unemployment benefits for
part-time workers
• Option to raise cap on municipal fines to $250
• Eliminate or suspend teacher
in-service training
• Optional delay of conservation &
development plans
• Optional delay of revaluation
• Eliminate bicycle access mandate
• Permit red light cameras
• DEP – Parks Maintenance
• Bradley International Airport
Appropriations &
Finance Committees
Final Budget
February 2011
April 2011
April 2011
$39.9 billion total spending
$42.4 billion total spending
$36.4 billion total spending
$2.0 billion assumed labor concessions
$2.0 billion assumed labor concessions
$2.0 billion assumed labor concessions
$3.9 billion tax and fee increases
$3.8 billion tax and fee increases
No Tax Increases
Creates 5 new income tax brackets,
raises all income tax rates
Creates 5 new income tax brackets,
raises all income tax rates
No Tax Increases
3¢ gas tax increase
3¢ gas tax increase
Caps petroleum gross receipts tax
10% corporation tax surcharge
20% corporation tax surcharge
No Tax Increases
Eliminates property tax credit
Reduces property tax credit to $300
Keeps $500 property tax credit
Eliminates 150 state jobs
Eliminates 71 state jobs
Eliminates 2,700 workers
including 1,380 managers
Funds 166 vacant positions
(costing $10.8 million per year)
Eliminates 114 vacant positions
Eliminates 166 vacant positions,
saving $10.8 million per year
Consolidations eliminate 24 agencies,
saving $9.0 million per year
Consolidations eliminate 57 agencies
saving $8.0 million per year
Consolidations eliminate 27+ agencies,
saving $18.9 million in FY 12 and
$27.6 million in FY13
Preserves municipal aid at current level
Preserves municipal aid at current level
Preserves municipal aid at current level
Keeps longevity pay for state employees
(approx. $40.0 million/year cost)
Keeps longevity pay for state employees
(approx. $40.0 million/year cost)
Eliminates longevity pay for
state employees
Who Pays Connecticut’s
Individual Income Tax?
6.8% of filers pay 50.7% of income taxes
(Source: Dept. of Revenue Services )
Please Contact Us
State Senator Toni Boucher
Legislative Office Building
Room 3400
Hartford, CT 06106
[email protected]
State Representative John H. Frey
Legislative Office Building
Room 4200
Hartford, CT 06106
[email protected]
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