CT residents face financial hardships due to state tax system

Connecticut’s tax system has been labeled as “regressive” for low- to middle-income residents in a new report that utilizes findings from the state’s Tax Incidence Study to substantiate its claim. The report, conducted by Connecticut Voices for Children, highlights the role of property taxes in contributing to this regressive system. Due to the fact that a town’s mill rate remains unaffected by a taxpayer’s income, individuals with lower to middle incomes end up spending a larger portion of their budget on housing compared to those with higher incomes.

Patrick O’Brien, the research and policy director of Connecticut Voices for Children and the author of the report, suggests that Connecticut could establish a fairer tax system by implementing a few policy changes. O’Brien outlines three key measures: firstly, eliminating and/or closing the state’s tax gap, which primarily benefits high-income and wealthy taxpayers; secondly, eliminating and/or reducing regressive tax expenditures; and thirdly, potentially increasing personal income tax rates for high-income and wealthy individuals. O’Brien argues that the additional revenue generated from these changes could be used to provide tax cuts for lower and middle-income households, as well as potentially implementing a state-level child tax credit. It is important to note that the state’s report is based on data from 2020.

O’Brien acknowledges that the state has made some changes to its tax system since then. However, the report from Connecticut Voices for Children demonstrates that despite these modifications, the tax system remains regressive. The report also highlights the wider implications of the state’s tax system, particularly in relation to income inequality. Connecticut recently ranked second, behind Massachusetts, in terms of income inequality, and O’Brien argues that the regressive tax system only exacerbates this issue.

To address these concerns, the report recommends the establishment of a task force to ensure that all future reports from the Department of Revenue Services include all the necessary information to provide a comprehensive understanding of the state tax system. The most recent report faced criticism for lacking certain data, further emphasizing the need for improved reporting practices.

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Three initiatives that have been approved could have a significant impact on Washington state. These measures, which are funded by Republican mega-donor Brian Heywood and sponsored by MAGA Republican Party Chair Jim Walsh, are intentionally deceptive and seek to cut billions of dollars in funding for critical public priorities, according to Aaron Ostrom, the executive director of Fuse Washington. The initiatives include repealing the state’s capital gains tax, undoing the Climate Commitment Act, and making the WA Cares program optional, which helps people save for long-term care. Heywood supports these measures because he believes Democrats in the state are not being challenged enough on taxes and other policies. However, Ostrom argues that repealing the capital gains tax would leave a significant budget shortfall, costing nearly $900 million per year and taking funding away from child care and schools. Supporters of Initiative 2109 argue that it is essentially an income tax, which is prohibited by the Washington state constitution. Despite this, the state Supreme Court ruled last year that the tax is constitutional. Ostrom emphasizes that all three initiatives pose a threat to the state, as they would devastate funding for education, dismantle environmental protections, and repeal efforts to care for seniors.

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Virginia child advocates are urging state lawmakers to take action and improve school funding. The urgency stems from the failure of several bills aimed at enhancing school mental health in their respective General Assembly committees. It is concerning that Virginia is ranked 48th for youth mental health by Mental Health America.

Cat Atkinson, mental health policy analyst at Voices for Virginia’s Children, emphasized the need for immediate action in light of the ongoing youth mental health crisis. Atkinson recommended having mental health professionals in schools to create a comfortable space for young people. By building relationships with staff, students can have their needs consistently met within the school environment.

Unfortunately, funding bills for mental health staff were either unsuccessful or postponed until the 2025 session due to their high costs. Collectively, these bills would have required a budget allocation of approximately $120 million for the years 2025 and 2026.

In addition to financial challenges, a long-term shortage of mental health professionals in schools further hinders access to adequate support. A report by KFF revealed that 48% of schools nationwide lack sufficient access to licensed mental health professionals.

The funding disparities not only impact mental health services but also have broader implications for school divisions. A 2023 report highlighted that Virginia’s school divisions receive less funding compared to most other states. Moreover, Virginia still relies on cost-reduction measures implemented during the Great Recession, which is outdated and fails to address the current needs adequately.

Atkinson emphasized that the lack of funding does not solely affect schools. Insufficient state funding places a burden on local communities, resulting in an inequitable education system where the quality of education depends on the neighborhoods in which students reside.

While the current situation is far from equitable due to significant variations in community resources across regions, Atkinson acknowledged that there are alternative ways to provide mental health care in schools. For instance, in 2023, the General Assembly passed Senate Bill 1300, requiring teachers to undergo trauma-informed care training every three years. Furthermore, Governor Glenn Youngkin’s Right Help, Right Now plan aims to strengthen school and community mental health support.

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