Keno, Tax Hikes, & Efforts to Circumvent the Spending Cap are NOT the Solution

May 28, 2015

Hartford – Senate Minority Leader Len Fasano (R-North Haven) and House Republican Leader Themis Klarides (R-Derby) released the following statement regarding ongoing budget negotiations between Democrat lawmakers and Governor Malloy including reports that keno is definitely part of the final budget, multiple burdensome tax hikes are still on the table in negotiations, and plans to circumvent the state spending cap are in place.

“Connecticut citizens deserve a budget that respects our spending cap, does not break promises made by our governor, and protects our citizens from an economic downfall. The fact that so many bad ideas, consistent with more and more taxes, are still being discussed by Democrat lawmakers is very disturbing. We have got to change the conversation while there is still time,” said Fasano.

“We have a budget problem. But tax hikes are not the solution, because Connecticut is already overtaxed. Averting the spending cap is not the solution, it’s a problem, because Connecticut cannot afford to exceed that cap and the citizens of this state have voted overwhelmingly to protect that control. Keno is not the solution, because it does nothing to address the real problems at hand. Democrat lawmakers are poised to implement the second highest tax increase in state history as a quick fix instead of identifying a long term solution to curb our out of control, unsustainable spending. We need lawmakers to get serious about long term solutions, without relying on gimmicks, without circumventing the spending cap and without adding more burdens onto our families,” said Klarides.

“We have heard from thousands of people who submitted testimony and signed our petition regarding the Democrats’ proposals. Their voices are clear: Connecticut residents cannot afford a tax hike. Neither can Connecticut employers. But the majority is still considering all the burdensome proposals put forward by legislative Democrats and the governor. A quick deal is not in the best interest of our state. If all these tax increases move forward that will be the final nail in the coffin for our state economy. Employers will leave. And jobs will leave with them,” said Fasano.

Sen. Fasano and Rep. Klarides pointed to multiple proposed tax hikes that are still allegedly on the table in Democrats’ budget negotiation with the governor:

  • New taxes on over two dozen business services including veterinary, accounting, construction, and data processing services
  • Eliminating the scheduled tax exemption on clothing and shoes under $50, necessities for families and children
  • Reductions to the value of tax credits that anchor jobs, industries, and investments in the state; thereby increasing taxes on Connecticut job creators by $76.5 million over the biennium
  • Reductions on the use of net loss carryforward that help vulnerable start-up companies gain a foothold— reducing this to 50% of net income in any income year; a $246 million tax increase
  • Institution of mandatory unitary combined reporting—which will impact Connecticut headquartered companies, and the state itself (a proposal the DRS Commissioner Kevin Sullivan once called “problematic” and Governor Malloy even raised questions about the potential impact on competitiveness back in 2011
  • Making the corporate tax surcharge permanent, imposing a $119 million tax increase over the next 2 years
  • Increases to the personal income tax for an estimated $345 million tax increase

In addition to not imposing additional taxes on Connecticut citizens, Fasano and Klarides also urge the Democrats to protect the most vulnerable HUSKY A adults in their final negotiated budget, including the family of four living on an annual income of $32,253.

To read testimony submitted by members of the public regarding Democrats’ proposed tax hikes visit: More information is available on The legislative session ends on June 3.