The state House of Representatives could vote as early as Tuesday on a tentative deal to close the state’s estimated $350 million budget deficit for the current fiscal year.
“There’s a tentative deal in place,” said Douglas Whiting, a spokesman for House Speaker Christopher Donovan of Meriden. “There’s still conversations taking place and likely will throughout the weekend.”
Some details of the deal are still being finalized, and the package is expected to be presented to the House Democratic caucus at 2 p.m. Tuesday. If the House passes the bill on Tuesday, the state Senate would then vote on Wednesday.
Despite any votes next week for the current fiscal year, the state is still facing a projected deficit of more than $700 million in the 2011 fiscal year and as much as $3.8 billion in the 2012 fiscal year.
The deal started coming together this week after Republican Gov. M. Jodi Rell revealed a new plan Monday to the top legislative leaders in her office. The leaders met again on Friday, and a tentative deal was reached.
Rell’s plan does not include any taxes of any sort, but Democrats have been pushing to increase the estate tax on Connecticut’s wealthiest residents. Some Democrats still feel burned that the estate tax was reduced in a deal last year as part of an overall package that included increasing the state income tax to 6.5 percent, up from 5 percent, for the amount of money that couples earn above $1 million.
But Rell never agreed to the final version and allowed the bill to become law without her signature. Now, Democrats have been trying to change the estate tax, which they view as essentially a tax break of about $75 million for wealthy families. The latest version calls for increasing the estate tax to a maximum of 20 percent on the amount of the estate above $10 million – a jump from the current maximum rate of 12 percent.
Some Capitol insiders wondered why the Democrats recently included the estate tax changes in a deficit-cutting bill, which Rell immediately vowed to veto. Now, some believe that the Democrats will craft a budget-cutting bill that Rell could sign and then a separate tax bill that she would veto. As such, the deficit would still be decreased.
Based on changes that became effective January 1, only those who die with an estate of more than $3.5 million are required to pay any estate tax. Previously, the threshold was $2 million.
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