Connecticut lawmakers ensured another showdown over the state's income tax yesterday as state senators rallied the necessary support for a special session vote on the tax system this month.
Twenty senators, the entire Democratic delegation, signed on to the movement, and their signatures were presented to the secretary of state yesterday.
Holding a special session requires petition signatures from a majority of legislators in both chambers of the state's General Assembly. All of Connecticut's 16 Republican state senators and 84 of the lower chamber's 151 members have already presented signatures to the secretary of state.
According to state law, the special session will be held two weeks from the day the petitions were presented, on Nov. 18.
Between now and the vote, lawmakers are planning six hearings, one in each of the state's congressional districts, to gather public comment on how to replace the state's 4.5% tax on wages and salaries. The levy has enraged many voters and even led to violent attacks on lawmakers.
In one instance, a lawmaker's house was reportedly shot at. In another, a legislator's wife was forced off the road while driving a car with legislative license plates.
Avice A. Meehan, ppress secretary for Gov. Lowell P. Weicker Jr., said the governor would not comment on the special session until lawmakers present a supplement for the current revenue system, which took effect only last month.
The key point, Ms. Meehan said, is not whether the lawmakers can muster opposition to the current system, but whether they can agree on a replacement.
"Although the Republicans have had better than six months to come up with a reasonable alternative, they have yet to do so," Ms. Meehan said.
She also doubted whether public comments on the income tax would solve the impasse over how to raise the roughly $7.2 billion the state government needs to run itself this year. "There has been, throughout this process, ample opportunity for public participation," Ms. Meehan said, referring to hearings she said were held shortly after the governor first proposed an income tax early this year.
But the public apparently decided it had more to say, and since the income tax took effect on Oct. 1, statewide disenchantment with Gov. Weicker has turned into unbridled rage, with the governor even being spat upon in a recent public appearance.
For lawmakers, the public outcry makes rethinking the state's revenue system a necessity, according to Sen. John B. Larson, the East Hartford Democrats serving as president pro tem of the Senate.
"I have both a public policy interest and a political interest in seeing it repealed," Mr. Larson said of the income tax during an interview yesterday. "The general public may in fact decide to repeal those who voted for it, and that's a great concern of mine, because I'm a Democratic leader, and a majority of Democrats have voted for it."
Credit rating agencies have acknowledged the danger of a possible legislative backlash against the income tax, although they have not yet usedthe prospect of an income tax repeal to justify a downgrading of the state's $4.3 billion in outstanding general obligation bonds.
On Sept. 13, when Moody's Investors Service moved to affirm its Aa rating on Connecticut general obligation bonds, the rating agency also noted that "the durability of the consensus that enacted a personal income tax has not yet been demonstrated" and that "future fiscal policy decisions will be made in a legislative environment that continues to evolve."
George W. Leung, a managing director at Moody's, said yesterday that "without a viable alternative," repealing the income tax "would have serious credit implications.
Mr. Leung noted that any plan eliminating the income tax will have to raise $1.36 billion, an amount that would require the state's sales tax to be raised to 13.7% from 6%, or raised to 8% and broadened to include such essential purchases as groceries.
At Standard & Poor's, which rates the states GO debt Aa-minus, Vice President Richard Marino said that if lawmakers muster the necessary two-thirds required to override the governor's veto, "then we'll examine the ramifications of it and see what alternative plans the state will have."
So far, the most dire action has been on the part of Fitch Investors Service. The agency placed Connecticut bonds on the Fitch Alert surveillance list, signaling a possible downgrading from the state's AA-plus rating.
In a news release Oct. 22, the rating agency said its action was "taken to express the conncern over a legislative movement to repeal the newly enacted personal income tax."
The implications are not lost on the Weicker administration. "The message has been loud and clear from Wall Street," Ms. Meehan said. "The only cloud on our horizon at the moment is the repeal movement."
