Remainder of this fiscal year, plus FY09/10 and FY10/11 (we kind of sort do bi-annual budgets in Connecticut)

Six Billion.

That’s $2,000 for every man, woman, and child.

1) The overall slowdown — fewer people working, and fewer people even getting cost of living raises. That hits the income tax.

2) Stock market crash.

Connecticut does not have reciprocal tax treaties with New York or Massachusetts. The NY one is a biggie — the people who commute from Fairfield County to New York pay all their earned income taxes to New York, and none to Connecticut.

What Connecticut can claim is the unearned income — such as capital gains on stocks. So Mr. Big Wig gets his multi-million dollar stock bonus…the initial bonus is taxed as income by New York, but future capital gains when he sold it is taxed by his residency in Connecticut.

No capital gains…no income tax for Connecticut. And in good years we collect A LOT of capital gains from those commuters.

3) Retail sales are down, so the sales tax is down.

4) Connecticut has a Gross Receipts Tax on gasoline. It means we tax not only the gas, but the state and federal road taxes on the gas! To the tune of 7%. 7% of $1.50 is a lot less then 7% of $4.00.