Connecticut - budget issues, governor and democrats agree on $1.00 cigarette tax increase..

August 30, 2009 - Republican Governor M. Jodi Rell and top Democrats still sharply disagree on many budget issues, but they have reached an accord on the cigarette tax: It needs to go up $1 a pack.

An internal document from the closed-door, confidential budget talks shows that Democrats now agree with Rell's proposal to raise the cigarette tax to $3 a pack, up from the current $2 a pack. That is one of the largest tax increases in Rell's package, raising $103 million more than the state currently receives.

The Democrats had been originally pushing for an additional 50 cents a pack before pushing it further to an additional 75 cents a pack as of January 2010. Now they are matching Rell's increase at a full dollar and her proposed effective date of October 1.

The state's most recent increase was in 2007, when the cigarette tax went from $1.51 to $2 a pack. The issue will be debated Thursday when the state legislature votes on the latest version of the Democrats' two-year, $37.8 billion budget plan during a special session at the state Capitol. "We are perfectly OK with the governor's proposal and expect to include it in our package on Thursday," said Douglas Whiting, a spokesman for House Speaker Christopher Donovan of Meriden.

If the cigarette tax increase is eventually signed into law, Connecticut's levy would be the second-highest state tax in the nation after Rhode Island's $3.46 a pack. The tax would also be lower than in New York City, where the combined city and state tax of $4.25 can push retail prices as high as $10 a pack.

But until the two sides can agree on more cuts in spending, many insiders believe that Rell will once again veto the overall Democratic fiscal plan. Rell's spokesman, Christopher Cooper, declined to use the word "veto" on Tuesday, but he said, "To date, the Democrats have not made the kind of real and meaningful cuts to state spending that … the governor would like to see as the way out of this budget mess."

Cooper added: "Her frustration has been that those cuts have not been made. If they continue to shuffle one column to another without making any kind of cuts, that's not going to be a very attractive budget proposal."

Democrats said Tuesday, however, that they had no intention of making further cuts proposed by Rell in some education programs, including Head Start, preschool, and the state's 62 family resource centers that provide child care, literacy programs and other services in public school buildings.

Some lawmakers now believe that the budget fight will last until after Labor Day.

Reference: Budget Negotiators In Accord To Raise Cigarette Tax To $3 A Pack By CHRISTOPHER KEATING, Hartford Courant, 8/26/2009.

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