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State Senator

Paul Doyle

Representing Cromwell, Middletown, Newington, Rocky Hill & Wethersfield

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Doyle Applauds Democrat’s Budget Predictability Plan

photo of Senator Doyle.

State Senator Paul Doyle (D-Wethersfield) today joined Senate Democratic leaders in supporting a ‘budget predictability plan’ that would help Connecticut avoid future revenue volatility while simultaneously reducing the chance of unpredictable budget deficits and paying down some underfunded liabilities.

The Senate Democrats’ plan permanently caps the amount of revenue that the state can expect to collect every year from its highly volatile estimates & finals (mostly capital gains) portion of the state income tax; the plan caps those estimates at $3.1 billion per year, the current year’s collection rate, and does not assume any more revenue will be collected from Connecticut’s wealthiest residents.

Any revenues that might be collected above that $3.1 billion in future years would be dedicated to increasing the state’s budget reserve (known as the ‘Rainy Day Fund’) or making payments on unfunded liabilities, such as employee retirement pensions. Contributions could also be dedicated to certain one-time capital projects, paying in cash, rather than borrowing money.

“This is an innovative idea that I think is very important, and I am proud to be a member of the Senate Democratic Caucus today as we put forward this plan,” said Sen. Doyle. “Many of us in the caucus and in the State of Connecticut are very concerned about the long-term future of the state’s budget, and in the past have not supported budget proposals put forward under the current system. We are concerned about long-term spending and future borrowing in our state and this innovative idea will focus on the future and improve our fiscal climate in Connecticut in the long run. As we all know, structurally, our pension costs are so significant that as difficult of a position we find ourselves in today, the out-years are poised to be even worse. This plan will help us stabilize our budgets in the future and I applaud our leadership for putting the focus on finding a sustainable solution to our fiscal problems.”

The Senate Democrats’ plan builds on recent Democratic efforts to lay out a Sustainable Path for responsible allocation of future year budget surpluses—also targeting budget reserve savings and accelerated debt repayment. Today’s proposal goes even further, dedicating volatile revenues above the cap level to savings even without the presence of an overall budget surplus.

“By limiting our state’s current and future reliance on highly volatile revenue streams, we can provide for more predictable budgets going forward and greater stability for all state initiatives,” said Senator John Fonfara (D-Hartford), Co-Chair of the Finance, Revenue & Bonding Committee and the architect of the budget predictability plan. “Dedicating volatile revenues we do receive to savings will strengthen the state’s fiscal position by improving our credit rating and paying down the unfunded liabilities that are now consuming an increasing share of state resources.”

The Senate Democrats’ plan sets realistic expectations for our capital gains and other volatile income tax revenues by permanently capping the estimates & finals (E&F) portion of the state income tax at projected FY 18 levels.

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