A historic week in more ways than one in Connecticut as record revenues continue to flow into our state in the form of tax revenue and, in the near term, federal pandemic funds.
We can now expect one of the biggest rounds of tax cuts in history.
NBC Connecticut’s Mike Hydeck spoke with Senate Pro Tempore Speaker Martin Looney (D-New Haven) about what the tax cuts could mean for residents of the state.
Looney also explains why a number of lawmakers from both chambers will not be returning for the next session.
mike hydeck“So the majority of Democrats are, of course, very proud of this budget. When the latest news came out with even more tax revenue, was there more room for bigger tax breaks for taxpayers? Think -you ?”
Martin Looney“I think what we did was exactly the right balance between meeting the unmet needs that we’ve struggled with for 14 years since the start of the Great Recession, where every budget cycle we were in crisis with big deficits, we always had to cut something from essential programs that we would prefer to see funded, so I think this time around we struck the right balance between a certain amount of tax cuts, over $600 million , and catch-up spending, as I would say, in many areas of social services.
mike hydeck“One of those areas of social services that Republicans and Democrats agreed on was mental health as it relates to children at all levels. Did we spend enough there, do you think? “
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 huge toll on children with isolation, alienation , exacerbation of conditions like depression, other things. So we know that many children suffer and find treatments inadequate. We know that in many cases private providers are simply not available for many children That’s why we wanted to make sure that we increased the resources that would be available in schools, to help children with mental health needs, and also to try to help them get more care outside of school. to find qualified, licensed and certified private providers outside of school as well.”
mike hydeck“Furthermore, one of the most important and immediate reforms that would bring relief to all of us was the elimination of the state gasoline tax at 25 cents per gallon, through December 1. Then- I wonder why diesel fuel wasn’t included, which is now a whopping $6.19 a gallon.”
Martin Looney“There was no consensus on the diesel issue. We mainly wanted to help drivers in Connecticut, people who use their car every day to get around, etc. And we realized that on July 1, we had no idea the wholesale price And that would potentially be higher than it was on April 1st when we instituted the 25 cent suspension on that gas tax That’s why we’re continuing this until on December 1.
mike hydeck: “Is it out of the question to act on diesel in the future?”
Martin Looney“Oh, no, nothing’s out of the question. I think we’ll definitely be looking at what the continuing patterns and trends might be. And we’ll be watching that and looking at that as we move forward.”
mike hydeck“Getting more and more people back to work means having affordable childcare. Should the Child Tax Credit have lasted longer than a year? We have a lot of temporary tax relief here. It’s one that maybe could have been extended, do you think, or not?”
Martin Looney“Well, the administration insisted that it be for one year. I will certainly support its extension and its permanent integration into 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 in our state. And to try to ensure that all unemployed people could pay their bills , we borrowed money from the federal government to pay unemployment benefits. Now business owners have to pay that back. Right now it’s $493, or about $500 million in debt, the state is. This budget provided $40 million for this. How was that How was $40 million calculated and could it have been more to try to help our businesses get back on foot?
Martin Looney“Well, we looked at the variety of state needs and determined that this figure would be appropriate. If we had put a lot more in there, there were other things we couldn’t have done. “
mike hydeck: “Again, the same thing. Going forward, is there a possibility that this may have more infusion of state money or we will leave it there until the next budget cycle ?”
Martin Looney“Well, I think when we come back to the next session in January, we’ll be looking at all of those things. And if we continue to project a strong and booming surplus, we can look at the unemployment fund again and maybe be addressed again.”
mike hydeck: “So now the $600 million tax relief is on the table. It’s expected to be, you know, a done deal. Republicans, though, have called for $1.2 billion tax cuts, including an income tax cut Senate Minority Leader Kevin Kelly said $1.2 billion was a responsible use of the money, said it doesn’t hasn’t hurt the budget and has returned more money to the taxpayers. What do you think of that?”
Martin Looney“Well, I think we’ve struck the right balance. If we had invested more in tax relief, we wouldn’t have been able to do the same on the social services side, or wouldn’t have been able to set aside so much for putting money into pension funds that have been, again, underfunded for so long. You know, if you look at this historically, it was Republican Governors John Rowland and Jodi Rell, who consistently refused to put money into pension funds, even when times were good.”
mike hydeck“So a number of your colleagues in both houses are not seeking re-election. What do you hear from some of them about why they’re leaving? And what does that say about the balance between Democrats and Republicans going forward? It’s somewhere around 20 people retiring, I think.”
Martin Looney“I think it may be more than that overall when you actually get to the House and the Senate. Well, that’s partly because some people feel like they’ve done what they hoped to do when they served, but others, I think, felt that other competing concerns in their lives, in terms of being able to sustain legislative service financially, as it increasingly becomes a job at full-time for part-time pay, despite the fact that an increase is coming into effect next year for the first time and over 20 years. This legislative increase for those elected in 2022, and going forward, if you look at it, adjusted for inflation, it’s still less than the last increase was worth when it came into effect over 20 years ago.”
mike hydeck: “So we will see each other at the next session in January?”
Martin Looney: “I expect to be there.”