Governor’s Budget is Give-and-Take for Businesses [WFSB]

February 19, 2015

Article as it appeared on WFSB
WFSB 3 Connecticut
HARTFORD, CT (WFSB) – Gov. Dannel P. Malloy released his two-year, $40 billion budget, which was “filled with tough choices” to Connecticut lawmakers on Wednesday.

The two-year budget has a spending increase of 3 percent and includes $590 million in cuts. While there are no new taxes, some tax credits and exemptions are slated to be scrapped.

“Even in this time of difficult choices, we must not ask any more of our middle class,” Malloy said. “Today I am proposing that we overhaul Connecticut’s sales tax, moving it to under 6 percent for the first time since 1971.”

After raising the state’s sales tax, Malloy now wants to lower it.

The governor wants to take away the tax free exemption for clothing under $50 dollars, which was going to be in place in July. During sales tax free week, only clothing up to $100 would be tax free, not $300, which it is now.

Even Democratic some leaders said they are skeptical on who really benefits.

“In my mind, it’s a bit problematic. Lowering the sales tax by four tenths of a percent is laudable,” said state Rep. Brendan Sharkey, who is a Democrat and the house speaker. “But I don’t think it’s significant enough that it warrants a lot of pain that will have to go into picking winners and losers.”

The governor’s budget also is a give-and-take for businesses. Malloy said he wants to eliminate the business entity tax, but Republicans said the trade off is scrapping a tax break for companies that invest.

“Businesses made investments depending upon receiving that credit. That’s the reason why they made these investments,” state Senate Minority Leader Len Fasano said. “Now halfway through these investments, we are saying we are not going to give you that tax credit anymore.”
The centerpiece is the governor’s transportation plan, which could cost $3 billion a year.

“Our roads are relied on by companies to ship their goods and transport their employees to work. Right now those commuters spend an extra 40 hours a year in traffic, due to unnecessary congestion,” Malloy said.

The transportation plan is the talk at the State Capitol. Some are calling it needed, but overly ambitious.

There is “five-year ramp up plan” and “30-year vision” in Malloy’s address about transportation in state. Here are some of the highlights of his plan:

Highways, Bridges, and Roads

  • Replacing the I-84 Viaduct in Hartford, which costs millions of dollars annually just for maintenance
  • Building new ramps to the Charter Oak Bridge in Hartford to eliminate accidents and traffic delays
  • Upgrading Route 9 in Middletown to eliminate accidents and reduce unnecessary congestion
  • Replacing the aging interchange of Route 8 and I-84 in Waterbury, known as the “Mixmaster”
  • Widening the five-mile, two-lane stretch of I-84 in Danbury between Exits 3 and 8 to alleviate congestion
  • Widening I-95 between Bridgeport and Greenwich Completing the Merritt Parkway interchange on Route 7 in Norwalk
  • Widening I-95 from Old Saybrook to New London, including the interchange with I-395, to mitigate congestion and improve safety
  • Completing Route 11; upgrading the Gold Star Bridge on I-95 between Groton and New London
  • Boosting funding to cities and towns by doubling the Local Transportation Improvement Program, increasing local bridge funding, and creating a new state-funded traffic signalization program.

Rail and Buses

  • Significantly expanding the capacity and improving the infrastructure of the New Haven Line to allow for subway-life frequency as well as fast and reliable intercity service
  • Building train stations up and down the New Haven-Hartford-Springfield Line (the “Hartford Line”), bringing commuter rail service to Enfield, West Hartford, Newington, North Haven and Hamden
  • Double-tracking the entire Hartford Line from New Haven to Springfield, allowing for more efficient and increased service
  • Constructing new stations along the New Haven Line, including the new Barnum Station in Bridgeport, reconstruction of the Merritt 7 station in Norwalk on the Danbury Branch, and a new station in Orange
  • Completing a new parking garage at Union station in New Haven to expand ridership and further encourage transit-oriented development in the area Replacing the Walk Bridge in Norwalk, as well as rehabilitating or replacing the Devon, SAGA and Cos Cob moveable bridges on the New Haven Line
  • Making improvements to the Waterbury Branch, including a new signal system, sidings and equipment to allow for increased capacity and more frequent service
  • Expanding local and express bus service as well as paratransit across the state to reach unserved urban areas and markets

Walkways and Bikeways

  • Creating a new program to help cities and towns install bike and pedestrian safety improvements in urban areas and town centers
  • Repairing existing trails that have fallen into disrepair
  • Completing new bike and pedestrian trails across the state

SEIU 1199 New England, which represents the Department of Developmental Services, said in a statement that they were “disappointed” with the cuts for direct care “in both the public and private sector.”

“We believe it should be a top priority that caregivers providing services to people with disabilities earn a fair wage. It should be a priority of our legislators and governor to provide funding for our state’s intellectually and developmentally disabled. We will work hard over the next few months to convince the administration, the legislature, and the people of Connecticut that building a stronger Connecticut starts with providing a living wage to workers and providing services for our most vulnerable,” EIU 1199 New England spokeswoman Jennifer Schneider said in the statement following the budget address.

Malloy addressed the full General Assembly around noon on Wednesday. To read his full speech, click here.