The Economy

The state income tax has dominated legislative revenue debates since its controversial enactment nearly two decades ago.

But the sales tax, whose base rate of 6 percent hasn't changed since that watershed debate in 1991, may be back in the spotlight next year as politicians begin the task of closing the largest projected budget deficit in state history. Read more

Are state lawmakers feeling buyer's remorse for the $4 million the state will "spend" on the back-to-school sales tax holiday beginning Sunday?

With a $3.4 billion deficit on the horizon and having borrowed money for the current year's budget, officials are divided on the revenue reduction, or "tax expenditure," behind the annual event. Read more

MANSFIELD - How do you keep six gubernatorial candidates from spending an entire forum attacking each other?

Answer: Don't give them the chance. Read more

Connecticut's transportation network is facing its own perfect storm of aging infrastructure, heavy usage and harsh weather conditions - all compounded by a slumping economy and shrinking government funding, according to a draft report from the state's Transportation Strategy Board.

The position paper outlining transportation needs, the first of four components that will ultimately comprise the board's 2011 update to its statewide transportation strategy, warns this confluence of bad conditions could require a major investment - despite the state's fiscal crisis - unless Connecticut wants to risk its economic future. Read more

When state legislators adopted a host of new tax and fee hikes last September, analysts estimated they would raise enough to cover about $700 million in projected revenue erosion tied to a slumping economy and provide another $250 million in extra funds to boot.

But with the final calculation on the 2009-10 fiscal year almost complete, nine of the 12 major tax categories in the General Fund fell short of their mark - including the two giants, income and sales, that provide over 80 percent of all General Fund tax dollars. Read more

State government is on pace to close the books on the last fiscal year $393.3 million in the black - $260 million higher than the surplus projected when the new budget was adopted in early May - Gov. M. Jodi Rell's administration reported today.

The latest surplus projection, which also stands about $150 million above the administration's estimate one month ago, stems from modest improvements in sales and insurance industry taxes and in revenue from licenses, permits and fees. Read more

State Comptroller Nancy Wyman projected this afternoon that state government will have a $242.9 million surplus when it closes the books on the fiscal year that ended Wednesday. Read more

Connecticut is one of seven states that will run out of money to pay state employee pensions over the next decade, coming up short in 2019 due to poor savings habits and generous guaranteed benefit levels, according to a recent study by Northwestern University.

And Connecticut's pension fund could become insolvent sooner than that, according to Joshua D. Rauh, an associate professor of finance at the university's Kellogg School of Management, if the 8 percent return on investments this state and most others typically count on are not realized in the near future. Read more

When Connecticut officials debate taxes, the arguments inevitably lead to comparisons with border states.

Anticipating a watershed debate in the 2011 legislative session as Connecticut confronts a mammoth, $3.4 billion budget deficit, legislators and gubernatorial candidates have stressed the importance of matching the neighbors: If taxes have to go up, make sure they stay below those in Massachusetts, New York and Rhode Island. Read more