Budget Deal Reached; Major Businesses Like GE and Aetna Complain [NBC]

NBC CT

Members of Gov. Dannel Malloy’s administration and top Democrats in the General Assembly hammered out the framework of a two-year $40 billion budget agreement over the weekend.

As the legislative session comes to a close, the next task is approving the proposed tax increases and property tax changes that they agreed to behind closed doors and without Republican input.

Companies and the GOP Criticize the Democrat written budget because it raises taxes on businesses (Published Monday, Jun 1, 2015)

“This is a one-party rule system and until people vote to change the fact that we have a one-party system, they can expect this for years and years and years to come” said Sen. Len Fasano, (R – North Haven), the Minority Leader in the Connecticut Senate.

Democrats touted historic tax relief as the most important result of budget talks. The budget, and the bills that lawmakers will pass to send to Gov. Malloy’s desk, will lead to a two-stage cap of the property tax rate for all cities and towns down to just more than 29 mills, which they say will help every middle class family in Connecticut.

Sen. Martin Looney, (D – New Haven), the President Pro Tem said, “This bill provides a substantial amount of property tax relief, both for those who live in high mill rate towns who are paying far more than they should be on their motor vehicle tax and also in terms of greater reimbursement in the payment in lieu of taxes program for communities that have a significant amount of tax exempt properties.”

Republicans say another part of the budget, a proposed reduction in a tax credit is actually a tax hike on working families of $100 per year.

“We’re not creating and maintaining the quality of life in Connecticut, that diversity that’s made us so great” said Rep. Vincent Candelora, (R – North Branford). “We’re merely trying to balance a budget on the backs of everybody.”

Democrats also proposed raising some taxes on businesses or instituting new taxes altogether as a part of the $2 billion revenue package agreed upon by the governor’s administration and lawmakers.

In response, both General Electric and Aetna, each with major operations in Connecticut, released statements effectively threatening to move elsewhere in order to avoid paying higher taxes.

Aetna’s statement read in part, “Connecticut is in danger of damaging its economic future by failing to address its budget obligation in a responsible way. Such an action will result in Aetna looking to reconsider the viability of continuing major operations in the state.”

Travelers also issued a statement, raising concerns about proposed tax increases.

“We are disappointed with the proposed tax increases in the budget agreement.,” Matt Bordonaro, second vice president of corporate communications, said in a statement on behalf of the Hartford insurance company. “Raising taxes again will increase the cost of living for nearly every resident and small business in the state, negatively impacting our employees and customers. Lawmakers should explore other solutions to the state’s budget to help keep Connecticut competitive and make it a desirable place to live and work.”

GE, a company that reportedly didn’t pay any taxes in 2010, sent out its statement earlier in the day saying, “The Connecticut economy continues to struggle as other states offer more opportunities and a better environment for business growth. It is essential that Governor Malloy and legislative leaders find a more prudent and responsible path forward for Connecticut and its citizens in their current budget negotiations.”

Governor Malloy’s administration responded with its own statement, framing the debate around improvements to infrastructure and transportation in Connecticut. Lawmakers are expected to approve a change to the way sales tax receipts are used, dedicating one half of one percent to transportation, which is estimated to generate hundreds of millions, in addition to billions in bonding over the next five years.

Devon Puglia with the Malloy administration wrote, “The historic investments we’re making, the largest in the history of Connecticut – an additional $10 billion – are good for job creation, good for the economy, and good for businesses, GE included. The bottom line is that the vast majority of households will see property tax relief as a result of the agreement.”

Democrats say Middle Class families won’t see higher taxes, while individuals earning $500,000 or more and families earning $1,000,000 will see income taxes go up during subsequent fiscal years.