From Connecticut to Wisconsin to Florida, States Try Creative Ways to Balance Budgets

Mar. 2, 2011 — -- From Connecticut to Wisconsin, states across the country are trying to fill budget gaps with new taxes and cuts in spending. It won't be easy. They're trying to be creative.

In Connecticut, Gov. Dan Malloy is even going after coupon clippers. As part of $1.5 billion in new taxes in Connecticut, Malloy proposes a sales tax on the original price of something -- never mind whether you get a big discount when you buy it.

"Working class people rely on things like coupons to generate savings," said Larry Dorman, spokesman for the Connecticut State Employee Bargaining Agent Coalition, which objects to the idea.

Dorman said the coupon tax and the governor's other budget proposals "hit the middle class disproportionately."

He said he is also concerned about the possible repeal of a $500 property tax credit and an increase in the income tax on middle-income wage earners.

"When you factor those proposals together, it's very unfair relative of what is being asked of corporations and the wealthy," Dorman said.

Ben Barnes, Secretary of the Office of Policy and Management, Connecticut's budget office, said that the taxes were not preferred solutions to balance the budget. He said they were painful but necessary features of a budget proposal.

"Every individual tax is an unattractive option. I'm going to acknowledge that," said Barnes. "Whether it's this tax or any other, we have to consider it with the overall budget package."

Barnes said Gov. Malloy's budget proposal was a "good mix of revenue, spending cuts and concessions from state employees" to balance the budget.

"From my perspective, it's been a number of years since we had an honestly balanced budget," said Barnes, who added that this year's budget had a deficit and was balanced though borrowed money. "We're trying to clean up a significant mess that we've inherited."

Dorman said the state employees union has been "constructively engaged" with the governor and "hopes to continue that process."

"This isn't Chris Christie or Scott Walker," said Dorman, referring to the governors of New Jersey and Wisconsin who have played tough with labor unions. "So there's some reason for optimism at this early stage."

Many states are feeling the pinch and getting creative to find financial solutions. In January, Illinois approved an increase in the sales tax and corporate tax rates, to the dismay of businesses there.