Right on time, the Democrats unveiled their two- year budget proposal. No sooner was it off the press than the Dems were at the podium pointing out how their budget meets and beats Governor Rell's version. In the words of Senate leadership, theirs is a "better, smarter, fairer" package. Well, let's examine the facts.

The Dems' budget plan increases spending by $17.79 billion compared to the Governor's $17.46 billion. In the first year, the Dems' budget will exceed the spending cap by $852.9 million. The Governor planned to exceed the spending cap by $500 million for educational funding. And who could forget the Governor's plan to increase the income tax? The Democrats announced that in their plan 88% of taxpayers will get a cut in their taxes through a more progressive income tax.

The Governor rebuts that in actuality, the Dems intend to increase taxes altogether by more than $1 billion through things such as taxing internet sales and eliminating the sales tax exemption on clothing. "The Democrats claim their plan to increase spending by 10.5 percent and raise taxes by $1 billion will provide a middle-class tax break - it does not add up. You cannot give with one hand and take away with the other," Rell said.

The Governor's and Dems' budgets also illustrate a conflict in priorities. Rell has been shouting from the roof tops her commitment to education - a $3.2 billion dollar commitment! Education funding for the Dems, however, is limited to school safety funding and the UConn Health Center. On the other hand, Rell was most criticized for overlooking critical funding for healthcare in her plan. The Democrats plan to allocate $300 million to health care initiatives. Among those initiatives: increasing Medicaid rates, expansion of current programs to reduce the number of uninsured, and extra resources for school-based health centers to improve primary care and prevention.

How to best assist municipalities seems to be up in the air as well. The Governor proposed a 3% cap on the property tax to help citizens and would have allowed some of the educational funding to be utilized by municipalities in other ways. Democrats criticized this plan as unrealistic and claimed it would tie the hands of local leaders. Municipalities were also afraid that the state would not honor the funding commitments necessary to fill the void in the future.

The Dems plan took some heat when the Governor wrote a letter to every mayor and first selectman in CT to warn them that in the Dems' budget plan, 70% of towns will receive less funding in the first year, and in the second year, every town would get less.

So the scale sways back and forth with CT taxpayer dollars hanging in the balance. The Democrats have scrapped the Governor's bill just as they said they would. In the year of a supermajority, it's a wonder how much the Governor can do about it. But just as the legislature can't solve every societal ill in one session, they also can't fully fund every worthy cause every two years. When the dust settles on June 6, the legislature has to decide where to focus their funding for the next two years, the Governor will have to decide if there is enough that she likes included in the budget in order to sign it into law, and the taxpayers will need to decide when to draw the line on too much government spending and too high taxes.

Every other year, the Finance, Revenue & Bonding Committee must tackle the inevitable - taxes. This past Monday marked the day that the Finance Committee members voted on a tax package that will result in $1.6 billion in new taxes. The measure was passed out of the Democratic-controlled committee by a vote of 35 to 15.

The tax package is overwhelming and comprehensive to say the least. It addresses the income, sales, cigarette, estate, real estate conveyances, and property taxes. The only tax seemingly omitted is an increase in the gasoline tax, which would have only compounded citizens' frustration at a time when Connecticut is facing some of the highest gas prices in the country.

It took fifteen years from the inception of the income tax in 1991 for it to be brought to the forefront again. And yet again, it is sure to be a battle of epic proportions. Governor Rell had proposed increasing the maximum rate on the state income tax by 10% over two years in her state of the state address. Democrats have thus far instituted a graduated tax rate system that they claim will cut income taxes for 90% of Connecticut filers.

Republicans, who tend to represent the above average income households in CT, are faced with battling a Democratic Majority determined to implement a progressive income tax rate. The problem is after the last election, many of the newly elected Democrats now represent the higher income communities also and are finding both the tax package and the educational funding package too hard to swallow.

The proposal as written will increase the income tax for joint filers making over $150,000 - a combined salary that the Republicans argue is the middle class. The Dems, on the other hand, have singled out the wealthiest 10% to increase the income tax while providing relief to the other 90%, a proposal that will more than likely secure their re-election bids if it should pass.

So how do these taxes affect you?

• Personal income tax brackets have been increased from two to six by adding four new brackets and increasing the highest marginal tax rate from 4.75% to 6.15% for the 2007 tax year and to 6.95% for the 2008 tax year.
• Taxable incomes that will see an increase: Incomes over $150,000 for joint filers, $79,700 for singles, $120,000 for heads of household, and $75,000 for married couples filing jointly would be affected by the higher rate.
• Taxable incomes that will see a decrease: Lowers the income tax rate from 5% to 4.85 % in the 2007 tax year and 4.75% in 2008. Joint filers earning between $20,000 and $100,000, singles making between $10,000 and $53,125, heads of household making between $16,000 and $80,000, and married couples filing separately that make between $10,000 and $50,000 will be realizing a savings in their income tax.

The Democratic Majority House and Senate leaders have only until June 6 to do battle with the Governor to negotiate on a tax plan that all parties can agree to. Everyone is sure to have their ear to the ground to see how things progress and we'll keep you up to date with all the details as they emerge.