WILTON, Conn. – State Sen. Toni Boucher (R-Wilton) released a statement about her concerns about a dip in the state’s income tax withholding revenue, citing her worries about employment and the state budget.
Boucher, a Republican, represents Bethel, New Canaan, Redding, Ridgefield, Weston, Westport and Wilton. She is a deputy minority leader in the state Senate.
She cited a report in the Waterbury Republican American in her statement.
“The newspaper reported: The state harvested a windfall last year from investors, the self-employed and others who make tax payments every quarter. But revenue from working people who have income taxes withheld from their paychecks is lagging."
Boucher pointed out that the state’s biggest source of revenue is the personal income tax.
"The monthly collection data for the income tax suggests that the major component for the low withholding collection was from the lower than anticipated collection of the tax on holiday bonuses. The reduction in either total or dollar amount of bonuses suggests that company profits are down which in turn hurts our residents who work in New York City.
“In addition to bonuses, the collection from wages and salaries was also down, which could be from lower employment and lower salaries of those employed. In addition, many residents cashed in stocks due to changes in the expiration of capital gains – that inflated revenues as did inheritance taxes, which came in higher mainly due to one large estate that accounted for nearly half of the increase."
Boucher said that both of those occurrences are highly unlikely to reoccur.
“When you couple that with assumed growth of more than 5 percent per year, the editor is suggesting that the biennial state budget is predicated on what may be considered rosy growth rates that will not be achieved. I agree and believe leaders need to take a serious look at how we can reverse this trend.
“Connecticut has stalled at more than 8 percent unemployment for several quarters and has shed 5,000 manufacturing jobs in the past several years. We need jobs. State subsidies for health care and pension benefits are crowding out the good investments that we should be making in manufacturing companies who are the backbone of our economy."
Boucher cited the high cost of living as well as the small job growth in Connecticut.
“We are already the most expensive state to live in in the continental United States. Add lack of employment and high unfunded liabilities and the concern grows to critical juncture. We must act now with real tax reform, infrastructure investment and proper financial restructuring.”