New Haven’s fiscal situation might look slightly less grim next year if the state legislature passes the two new bills proposed by Democrats in Hartford.
The Democrat-controlled Appropriations Committee approved last Thursday a $16.2 billion budget proposal that would increase the amount of money spent on municipalities. But Gov. M. Jodi Rell said in a statement that the budget, which would increase state spending by more than 7 percent, is unaffordable.
New Haven also stands to gain under the tax package approved separately on Monday by the Finance, Revenue and Bonding Committee. The proposal includes a 10 percent state Earned Income Tax Credit, which benefits low-income working families and has been heavily lobbied for by Yale students. In 2002, New Haven residents received nearly $20 million from the federal EITC.
Rell, in a statement released by her office, criticized the finance bill for failing to follow through on a proposal to eliminate the tax on cars, a proposal she first mentioned in her State of the State address this year. The governor’s office declined to comment on her position regarding the EITC Monday.
Paul Nunez, a legislative assistant to New Haven Mayor John DeStefano Jr., praised the Democrats’ budget for increasing the amount of money given to cities to offset property taxes lost because of nonprofit institutions, payments that are crucial to New Haven because so much of the city’s property is owned by tax-exempt institutions, such as Yale. But Nunez said that though the new budget proposal would fund cities more than a counter-proposal delivered previously by Rell, the new budget still does not fully fund the state’s obligations to its municipalities.
“It would literally wipe out the surplus that they had this year,” Nunez said.
Nunez said the budget also includes money for Leadership, Education and Athletics in Partnership Inc., an organization that provides activities for youths, as well as nearly $700,000 to help the city create jobs year-round for youth.
But some complained that the budget spends too much of the current state surplus. State Rep. Sonya Googins, a Republican from Glastonbury, said she voted against the budget because it did not save enough of this year’s budget surplus and because it contains a provision that would withhold energy assistance from hospitals that do not provide the morning-after pill, known as “Plan B.” A bill died last week in the Public Health Committee that would have required that hospitals carry the pill, including Catholic hospitals opposed to it on religious grounds.
“Overall, the document that came out of the committee was clearly a partisan budget,” Googins said.
But Googins did praise the budget for passing along more money to municipalities, saying that the state is overdue in its obligations to help towns resist the need to raise local property taxes.
Within the Finance Committee, the precise level of support for the EITC is unclear, State Rep. Pat Dillon said, and the bill as a whole may be revised before it is passed on to the Senate and the House and put before Rell. The bill, she said, did not address many proposals that the governor supported, including her proposal to eliminate the state tax on personal automobiles.
“The whole bill may very well get revised now that it’s going out of committee,” she said. “The bill that we did is really a blend of a lot of things that a lot of people were interested in.”
Eric Kafka ’08, a member of Connecticut Students for Just Taxation, said he was cautiously optimistic that the bill would be passed this session. He said their coalition, made up of students from Yale, the University of New Haven and Southern Connecticut State University, will continue their lobbying efforts on behalf of the EITC.
“There’s a significant and real chance that if we put a strong effort behind this bill that it will pass this session,” he said. “It’s definitely not a sure thing. However, we were told at the beginning of the session that was impossible, and … it’s now in the Finance Committee’s budget.”
Both the appropriations and finance bills will now be debated upon by the full House and Senate, along with the governor’s office, before being voted upon. This legislative session ends May 3, but Nunez said that if a compromise is not reached in time, the legislators may have to go into a special session to finish negotiations.