State Budget

As everyone knows, the US is the midst of a recession and Connecticut has been hit especially hard. In Fiscal Year (FY) 2012, there is an estimated $3.4 billion deficit and in FY 2013, a $3.2 billion deficit. This problem is too big to solve with any one approach. Relying exclusively on budget cuts would detrimentally impact families that are already struggling to stay afloat. We need a balanced approach that includes new revenues.

Better Choices for CT: Revenue Solutions

Possible Revenue Options

Citizens for Economic Opportunity (CEO) supports the following revenue options to help balance the state's budget:

Enacting a more progressive income tax.  This could potentially raise between $200 and $600 million every year. 

• Closing unfair corporate tax loopholes through mandatory combined reporting.  Currently, our tax system allows large, multi-state corporations to artificially shift profits to subsidiaries in states without corporate income taxes.  Connecticut ends up losing millions of dollars as a result and local businesses are put at a competitive disadvantage.  Furthermore, the tax responsibility is then shifted to small businesses and individuals.


• Delaying the reduction in the estate tax.  If Connecticut is considering cutting services that primarily benefit the most vulnerable populations in our state, it would seem imprudent to simultaneously do something to make the wealthiest even wealthier.  Connecticut can certainly not afford an estate tax cut that would exclusively benefit the most affluent individuals. 


• Reducing unwarranted tax expenditures.  There are approximately $5 billion in tax credits, reductions, and exemptions for businesses and individuals.  Some of these are incredibly beneficial and helpful while others are thought to valuable but mostly just diminish state revenue with little tangible benefit.  There needs to be a system in place to evaluate whether these tax expenditures are an efficient use of precious state resources or not.


• Raising taxes on items with negative health consequences (e.g. soft drinks & alcohol).  Increasing taxes on unhealthy products can not only raise revenues, but help to encourage healthier behavior and eating habits.  Even a small tax increase can raise several millions dollars.

Enacting some or all of these proposals have the benefit of protecting the most vulnerable populations, ensuring a balanced approach to solving our state’s deficit, and positioning us to come out stronger following the end of the recession.