Yesterday, 2/12/07, the Cafe had 263 visitors and 667 page turns.
Jodi Rell surprised Republicans and Democrats by announcing her tax plan for the coming fiscal year 2007/2008. She proposed to increase the state income tax by 10% for the coming year followed by similar increases over the next 5 years. As this affects Woodstock taxpayers, the plan is intended to increase state funding of our education system and provide property tax relief. In theory, if this plan is implemented, our property taxes should be held in check while our state income tax should rise. In presenting this plan, Rell restated her belief that our education system is an investment in not only our children, but also in the future economic well-being of our state (I could not agree more). Her plan also provides funding for healthcare coverage for low income families through the Charter Oak healthcare plan that provides medical coverage for state employees. To implement her entire plan, Rell will have to raise the funding cap that currently limits increases in state spending.
‘a taxpayer’ has a very good point below. Property tax money stays in town; some or most income tax money may go elsewhere. Also, see Lucida’s comment about the impact of eliminating the car tax.
The political response to this plan was perhaps predictable. Joe De Stefanoâ€™s office (Rellâ€™s Democratic opposition for governor in the recent election) stated succinctly that Rell â€œdeserves an A.â€? The office further stated something to the effect that they did not know that Rell had the courage to do this. Senate minority leader, DeLuca (Republican from Woodbury) said that he doubted that a single Republican would support this proposal. The Democrats (the majority) were surprised, perplexed, and perhaps jealous of Rellâ€™s plan.
Is DeLuca speaking for Mike Alberts, our Republican State Representative, who is fully aware of Woodstock taxpayers concern about high property taxes in relation to our school system funding? Iâ€™m sure Woodstock citizens would like to hear Mike Albertsâ€™ response to Governor Rellâ€™s proposal.
Last summer the CafÃ© published a virtual debate between Mike and his opponent, Sherri Vogt. Of course, Mike defeated Sherri in the recent election by a little over 200 votes. This virtual debate was based upon a political questionnaire from the Connecticut Business & Industry Association (CBIA) filled out by the two candidates. Here is a snap-shot of that debate:
1) What do you think is the most important issue facing the state of Connecticut?
Mike: Improving the stateâ€™s business environment is our most critical issue.
Sherri: The most important issue facing the voters in the 50th district is the high property taxes and our over reliance to support schools with this tax.
2) Do you support strict adherence to the existing constitutional cap on the growth in state spending? Why or why not?
Mike: Yes. Itâ€™s the will of the people.
Sherri: I would like to see the legislature revisit the issue and redefine the spending cap.
4) The state of Connecticut has a budget surplus; how would you use it?
Mike: I would use the budget surplus as an opportunity to reduce taxation.
Sherri: Schools, environment, roads.
13) Would you support a state-run and state-supplied health insurance plan for all citizens?
It seems from these answers and the others in the questionnaire that Sherri Vogt would have been enthralled with Rellâ€™s plan.
I thought that it would be interesting to consider the financial impact of this tax proposal on Woodstock taxpayers. I encourage readers to fill in gaps or correct me where I am wrong.
Overall the Rell plan will generate $617.5 million in new revenue for 2007-2008, and $650 million for 2008-2009. A proposed raise in the cigarette tax will generate $86.4 and $82.8 million, respectively for those fiscal years also. It is proposed that $1.1 billion will go to education over the next 5 years.
The purpose of Rellâ€™s funding initiative is â€œTo ensure that every child in Connecticut has equal opportunity to receive a suitable program of educational experiences. To ensure that the stateâ€™s public schools offer a planned, ongoing and systematic program of instruction that guarantees a breadth and depth of curriculum provided by competent professionals in a safe and supportive school settingâ€? (page 445 of the detailed budget plan, Governor Rellsâ€™ website). With this goal in mind, Rell proposes an increase in funding of basic grants to public schools of $265.2 million (increase) for 2007-2008 which is higher than the original projected annual increase of $183.4 million over this year. Funding of special education programs will increase by $14 million over this year.
The state block grant to the Woodstock public school system increased approximately 0.5% in 2006-2007 (to an estimated $4.6 million). It has been stated that under Rellâ€™s new tax plan every school system will receive, at minimum, an increase of 3% in funding from the state which would be approximately $161,000 in additional funding (3.5%) for Woodstock schools (anyone who has a different figure, please comment). I do not know if this increased funding can be negotiated by the Board of Education but I assume that Representative Mike Alberts could be helpful if negotiation was possible. To what extent special education would receive extra funding from the state is a mystery to me but excess costs for special education (funded by Woodstock property taxpayers) were $120,000 for the 2006-2007 school year.
In Woodstock for the 2006-2007 fiscal year tax revenues were estimated at $12.35 million, up 6% or $702,000 from the previous year. Total income for the Town was estimated at $19.2 million. The Board of Education ended up with approximately $14.14 million ($4.6 million coming from the state) for 2006-2007 – an increase of 4.35% over the previous year. If the support of the Woodstock education system increased another 4.35% for the 2007-2008 budget, this would be a budget of $14.76 million increased by $620,000 from the 2006-2007 budget. I presume that if the school system were to receive an additional $161,000 from the state for school funding, then this money would reduce the additional $620,000 funded by taxpayers to $459,000 (again any mistake I have made should be pointed out with comments). Does this mean that Rellâ€™s plan is going to save Woodstock taxpayers $161,000? This is 1.3% of our property tax revenues. Does this mean that my property tax bill of about $3000 this last year will be diminished by $39? Governor Rell also proposes to eliminate the car tax that in my case was about $200. So in my case I may be $239 in the black this year. But what impact does elimination of the car tax have on the Woodstockâ€™s tax revenues? I always felt that the car tax was okay because of the need to maintain our roads. One more thing â€¦If income taxes are to be increased by 10%, then my state income tax will go up by $508. If I subtract the $239 that I may make locally from the new tax plan, I end up $269 in the red. I think Woodstock needs more than $161,000 from the state to off-set education costs and the $120,000 in excess special education costs. I hope someone can come up with more favorable math.