Republicans Fight State Budget Tax Hikes [WFSB]

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WFSB 3 Connecticut
HARTFORD, CT (WFSB) – As the finish line neared for the legislative session, the state budget was passed in the House and Senate on Wednesday.

Changes are now being made to the state’s budget after some of the state’s largest companies voiced strong opposition to proposed tax increases.

The two-year $40 billion agreement has even caused a rift within the Democratic party. The proposed budget caused some members to side with Republicans and vote against it.

The plan includes a $700 million tax hike for the wealthy and businesses over two years.

General Electric and Aetna said their taxes are already too high, and the current budget plan would bolster them even higher.

Aetna said the proposal would “undermine the competitiveness of Connecticut-based business and will lead to an exodus of jobs and business.”

GE added that the budget “makes businesses, including our own, and citizens seriously consider whether it makes sense to continue to be located in this state.”

The statements turned up the heat on lawmakers who said they have been straining to reach a final agreement.

If 12 Democrats side with Republicans, Gov. Dannel Malloy and Democratic leaders have a problem. The budget will fail.

“Our overall goal is to get as close to unanimous vote as we can, especially on our side of the aisle,” said Rep. Joe Aresimowicz, the House of Representatives’ majority leader. “We will keep doing that until we put it up on the board. If folks feel they have to vote no, they need to understand what the district stands for and that’s their district’s vote.”

The Democrats wanted to put this agreement to a vote Monday night, but that didn’t happen because there are not enough votes to pass it. Eyewitness News has heard that the Democratic leader in the House is making changes to that agreement.

In the meantime, Republicans said they are concerned with the size of the proposed tax increases.

“This would be the second-highest tax increase in the state’s history on top of four years ago, [which was] the highest tax increase in the state’s history,” said Rep. Themis Klarides, the House’s Republican leader.

The agreement reached between the governor and Democratic leaders includes property tax relief and transportation improvements. But critics said it relies too little on spending cuts and too heavily on taxes.

The House was in session on Tuesday morning while the Senate will be in session later Tuesday afternoon.

Democratic leaders had been behind closed doors all day on Tuesday, along with the governor, and changes were reportedly being made because they are worried the budget proposal could fail.

Eyewitness News was told some lawmakers are being given extra money for their districts if they go along with the agreement, but the agreement isn’t so popular.

“When they have had the huge public outcry from citizens and businesses – it doesn’t surprise me they have made a few changes but we have a long way to go before anything substantive changes in this budget,” Klarides said.

This budget vote is being called the worst ever because just hours before the end of the legislative session, lawmakers don’t know exactly what they will be voting on.

Lawmakers must reach a deal before the legislative session wraps up on Wednesday.

Gov. Dannel Malloy’s two-year, $40 billion budget has seen its share of rewrites, and even on Wednesday, the revisions continued.
However, the budget was passed in the house 73 to 70 with eight representatives not voting.

The State Senate passed the budget on Wednesday night at about 11:30 p.m., 19 to 17, just a half hour before the deadline.

Proposed tax hikes appeared to hit just about everyone, opponents said. The middle class is not spared.

The budget has $2 billion in new taxes, and it still leaves the state with a hole of more than $1 billion.

However, the bill would offer tax relief and lower the car tax in about 60 cities and towns.

Following its passage, Speaker of the House Brendan Sharkey, D-Hamden, took to Twitter.

“Lower car taxes will make a real difference for #ctfamilies. Under this budget, most car owners will see a cut in their car tax,” he tweeted.

The budget also cuts back on property tax credits, changes the amount of clothing that’s tax-free and puts taxes on parking and car washes. Sharkey said the budget “invests in Connecticut’s transportation infrastructure which is critical to our future economy.”
“As we have done throughout the session, we have listened to ideas and concerns of all interested parties and addressed those issues whenever possible. This budget is no different,” Sharkey said.

Meanwhile, businesses would get whacked with corporate tax hikes of $700 million over two years. That resulted in scathing statements from Aetna, Travelers and General Electric as well as further changes to the budget plan.

Even Democrats, the majority in the legislature, have struggled with their own members, pressuring more than a dozen of them to vote “yes.”

Republicans, on the other hand, said they have been shut out of the process. They had been waiting on the sidelines as changes to the plan continue to be made.

“When they have had the huge public outcry from citizens and businesses, it doesn’t surprise me they have made a few changes, but we have a long way to go before anything substantive changes in this budget.” said Rep. Themis Klarides, Republican leader.

Senate Minority Leader Len Fasano, R-North Haven, and Senate Minority Leader Pro Tempore Kevin Witkos, R-Canton, released a joint statement after the budget passage in the House.

“The draconian method that the Democrats used to force this budget bill, universally agreed to be a bad budget, through the legislature is completely unacceptable. This disastrous budget is only overshadowed by an even worse process. The budget began with special interest deals behind closed doors. It is now ending with a vote negotiated behind closed doors, in the hallway and on the floor – shaped by deals made in exchange for votes. The budget, the implementer and future bonding agendas will disclose the real truth.”

The heaviest burden falls on businesses, such as General Electric, Aetna, and Travelers, who have spoken against the proposed budget, but the democratic leaders said these companies have not been paying any taxes.

“Decisions being made by corporations like GE are made in a board room without regard to what the tax policy or climate is in the state of Connecticut,” Sharkey said.

Democratic State Rep. Frank Nicastro, D-Bristol, said he was on the fence but voted in favor.

“I am not pleased with it, but I know it could have been a lost worse,” Nicastro said.

Even with the backlash, the State Senate president said he still feels it is a good plan.

“I think most moderate income people are going to see a reduction in this budget,” State Sen. Martin Looney said.

The governor is expected to discuss the conclusion of the legislative session on Thursday morning at 11:15 at the state capitol.