When it comes to income tax — the tax paid on one’s personal income — Wilton residents paid the ninth highest amount in Fairfield County and the fifth highest amount in the DRG-A in 2015, according the Connecticut Department of Revenue Services’ 2015 Personal Income Tax by Municipality data.
Department of Revenue Services Planning Specialist and Legislative Liaison Ernest Adamo told The Bulletin that 2016 data won’t be available until later this year.
According to the 2015 data, Wilton residents filed 7,374 tax returns and paid a total of $104,403,853 in state income tax in 2015, representing $14,158 tax per return.
Greenwich paid the most income tax in Fairfield County at $650,278,422, and New Canaan residents, who filed 7,692 returns, paid the most tax per return at $27,471.
To see what all Fairfield County municipalities paid in state income tax, see the accompanying chart.
Statewide, Connecticut residents paid $6,573,358,994 in personal income tax in 2015, according to the revenue department’s municipal data.
According to the U.S. Census Bureau’s 2015 population estimates, Fairfield County residents made up about 26% of Connecticut’s total population that year, but paid 43% of the state’s personal income tax. In Fairfield County, a total of 408,066 returns were filed and $2,797,433,883 was paid in 2015 — representing $6,855 tax per return.
Connecticut implemented personal income tax in 1991, the initial structure of which was a 4.5% flat rate on Connecticut adjusted gross income (AGI) exceeding $12,000 for single filers and married individuals filing separately, $19,000 for heads of household and $24,000 for joint filers.
According to the Department of Revenue Services, the income tax was made “more progressive” through automatic credits that phased out at higher income levels.
In 2015, the tax rate for individuals in the second-highest income tax bracket increased to 6.9%, and a new top marginal personal income tax rate of 6.99% was created.
The current state income tax is progressively graduated with seven rates ranging from 3% to 6.99%.
Today, personal income tax is one of the biggest revenue generators for the state of Connecticut.
Adamo noted that the data in the department’s annual reports differ from its Personal Income Tax by Municipality data for several reasons.
The municipal data only includes CT-1040 resident income tax returns and excludes returns with an invalid zip code, he said, while the annual report data includes both non-resident and resident returns, CT-1065/1120SI partnership payments, and “payments made as a result of audit assessments from prior tax periods, and penalty and interest payments.”
What does the state do with the money it rakes in from personal income tax? Deposits it into the General Fund, Department of Revenue Services Commissioner Kevin Sullivan told The Bulletin.
“Other than expenditures supported by the Transportation Fund and a few self-sustaining regulatory funds, state income tax deposits to the General Fund [pay for] a majority of the budgeted costs for state agency operations, state programs and services, state aid to municipalities and schools, state employee benefits, and teacher retirement, including healthcare,” said Sullivan.
Governor’s proposed budget
In May, Gov. Dannel Malloy released a revised state budget proposal for FY18 and FY19 that allocates the following in total state aid to the town of Wilton:
- FY18: $523,337.
- FY19: $448,073.
Malloy’s originally proposed budget included $431,204 in special education aid for FY18 and FY19, but his revised budget got rid of funding for both years.
Wilton was also scheduled to get nothing under the Education Cost Sharing Grant in the governor’s original budget, and that did not change.
Municipal Revenue Sharing Grant (MRSF) was another hard-hit area. Wilton was scheduled to get $547,338 both fiscal years, and that was cut to zero in the revised budget.
The revised budget still includes having towns reimburse the state for the teachers’ retirement fund. For Wilton, that amounts to $3,923,149 in both FY18 and FY19.
Taking into account what the town will receive from the state — such as road aid and Local Capital Improvement (LoCIP) funds — and then applying the pension fund payment, that leaves Wilton in the hole for $3.39 million in FY18 and $3.47 million in FY19.