Rowland
Targets Property Tax Credit
Democrats Balk, But Remain Optimistic
About A Budget Deal
May 24, 2003
By
CHRISTOPHER KEATING, Capitol Bureau Chief
Trying to
close a growing budget deficit, Gov. John G. Rowland on Friday proposed
cutting the popular property tax credit by $200 annually - a move Democrats say
would hurt many middle-class families.
Rowland is
calling for dropping the credit retroactively to $300, down from the current maximum of $500, for the2003 calendar
year and beyond. The credit was created by Democratic legislators in the
booming 1990s to help middle-class property owners.
Other Rowland
budget-cutting moves were criticized this week by the union leaders representing
prison workers, and environmentalists
blasted the governor and the Democrats for their plan to tap energy conservation
funds. But
though Democratic leaders were hopeful of reaching a budget deal, they immediately
pounced on Rowland's property tax credit idea Friday, saying there are other
ways to raise taxes and close the budget deficit.
"It's a
bad idea," said Senate President Pro Tem Kevin B. Sullivan of West
Hartford. Rowland said Friday he was essentially forced into proposing the tax
increase because he needs to close a projected deficit of about $100 million in
the fiscal year that ends June 30 – slightly more than one month away.
"I
think it makes more sense to raise that additional revenue, rather than
borrowing the money" to close the deficit, Rowland told reporters in his
Capitol office. "It's far more palatable than increasing the sales tax
from 6 percent to 6.5 percent or even [raising] the inheritance tax or even an
income-tax increase."
Democrats
voted recently to increase the sales tax to 6.5 percent, but Rowland vetoed
that plan last week. Now, Democrats and Republicans are trying to reach a
compromise before the legislative session adjourns at midnight on June 4.
Of all the
alternatives, Rowland said, lowering the credit is the best option.
"The
property tax credit on your income tax is very confusing," Rowland said.
"Most people don't even know we have it."
Despite his
opposition to cutting the credit to $300,Sullivan expressed optimism Friday
that Rowland has shown a willingness for bipartisan compromise that could lead
to a budget resolution without wrangling all summer long, as some had
predicted.
Sullivan and
House Speaker Moira K. Lyons of Stamford became suddenly optimistic this week
upon learning that President Bush's federal budget compromise would send an
additional $250 million to Connecticut over the next two years.
"They
found me a bag of money with [$250] million in it," Lyons said with a
smile on her face. "That clearly helps us enormously in solving the budget
deficit."
Inside the
Capitol, optimists and wishful thinkers have been saying they expect the state
employee unions to provide concessions and ease the budget-cutting pain.
But Rowland
and his budget director, Marc S. Ryan, both said that no talks are scheduled,
and none are planned. Rowland and the unions first started talking back in
November, and the two sides have not agreed on even a dollar in concessions
during their on-again, off-again talks.
"We are
not negotiating with the unions. I have moved on," Ryan said. "It's
not the party line. It's reality. We are not negotiating through a third
party."
The state's
largest union, the American Federation of State, County and Municipal
Employees, AFSCME, pounded Rowland Friday over his call for sending an
additional 2,000 prisoners out of state to save $11 million next year and $22
million the following year. Rowland told reporters that there was absolutely no
reason for Democrats to oppose the plan, other than "fighting for the prison-guard
unions."
Steve
Carbone, vice president of AFSCME Local 387 at the Cheshire prison, said the most
costly prisoners – those needing dialysis or those with mental health problems
–are never sent out of state.
"The
inmates they send out of state are the least costly to the state of
Connecticut," said Carbone, who traveled to the Capitol to criticize the
proposal. "Until [Rowland] treats state employees with dignity and
respect, he's probably
not going to
get a dime" in concessions.
Besides
sending more prisoners out of state, Rowland said Friday he would reduce the
budget deficit with additional cuts that would bring the budget to $13.38
billion for the next fiscal year - an increase of about 1percent.
The budget
pays for everything from dental care for prison inmates to the salaries of more
than 50,000 state employees. Based on state payroll records for total wages
paid in 2002, three of the highest-paid state employees are University of
Connecticut basketball coach Jim Calhoun at more than $947,000, UConn women's
basketball coach Geno Auriemma at more than $665,000,and UConn athletic
director Lew Perkins at more than$430,000.
In the continuing budget battle, environmental
activists have criticized both legislators and Rowland for proposing to transfer
at least $72 million to the state budget from the Energy Conservation and
Load Management Fund and the Clean Energy Fund.
The funds are generated from
payments by utility customers, and the money is intended to promote energy
conservation and reduce electricity demand. Model and environmental activist
Christie Brinkley is expected to