Testimony on SB 877: AAC Revenue Items To Implement The Governor’s Budget

March 15, 2019

Finance and Revenue Committee

Submitted By: Stephen Wanczyk-Karp, LMSW

The National Association of Social Workers, CT Chapter representing over 2500 members supports SB 877. It is clear that the State needs to raise new revenue if we are to protect funding for the most vulnerable, and low-income residents of our State.

Social workers work with individuals and families who struggle every day to make ends meet. Current safety net programs, while often not fully sufficient, are nonetheless a lifeline for these families. Cuts to human services programs due to a budget deficit is not only a financial stress, it is a psychosocial stress of fearing what will happen if an economic problem arises, such as a serious health care need, a car needed replacement or loss of employment occurs. How will one pay for rent, utilities, food and other necessities? What other costs will have to go unpaid? For parents the pressure of having children when you do not have adequate means to support them can lead to anxiety, difficulty with family relations, and even depression. These are the hidden social costs that often are not fully thought through in this budget debate. They are real costs with ramifications that go beyond the debate on the state budget, with negative impacts that ripple into many aspects of life, for the individual, family and community. As social workers we know that “life can change in a second” and when that change happens low income individuals and families rely on government to be of assistance. When the programs are no longer in place due to fiscal cuts that can have devastating effect.

Besides support for the Governor’s proposed revenue side of the state budget, we recommend that the following be included in the Finance Committee’s and adopted budget:

  • Increasing the Personal Income Tax Rate on income above $250,000 for single filers and $500,000 for couples.
  • Restoring the Capital Gains and Dividends Taxes for top tier households.
  • Increasing Connecticut’s low effective Corporate Tax Rate.
  • Adopt the proposal by Senator Looney to enact a tax on luxury homes.

We also support removal of the “volatility cap” that would force much of the new revenue into the “Rainy Day Fund” rather than to be utilized to maintain current vital safety net/human service programs, particularly Medicaid and SAGA.

In a 2018 study by the Institute of Taxation and Economic Policy it is reported that individuals who make less than $23,300 pay approximately 11.5 percent of their family income in sales, property and income taxes. The top 1 percent of earners in Connecticut pay only 8.1 percent of their family income in sales, property, and income taxes. This inequity in taxation needs to be corrected and support for SB 877, with the additional revenue recommendations above is a good start toward a more equitable state budget.

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