All Sides Press Their Case On State Budget [Courant]

June 24, 2015

Hartford Courant

HARTFORD — House Democrats met privately Tuesday to talk about the state budget, while Republicans called for the budget to be scrapped for a new start.

And at the same time, about 100 social services advocates rallied at the Capitol, demanding that the budget passed June 3 be kept intact.

It was a busy day at the Capitol as all sides prepared for a special legislative session scheduled for June 29 and 30 to address changes to the budget.

Republicans called a news conference at which they said the budget passed by the legislature’s Democratic majority hurts the middle class by reducing the property tax credit and lowering the income threshold so that fewer taxpayers would qualify for the income tax credit. The state’s largest cities, including Hartford, Bridgeport and Waterbury, are among the top 10 communities that benefit most from the property tax credit, Republicans said.

Democrats countered that a budget provision would make car owners in the cities the biggest beneficiaries of a reduction in the car tax. Although the size of the tax cut depends on the value of the car, the owner of a 2013 Honda Accord in Waterbury with a market value of $18,000 would save $364 a year under the plan, officials said. The owner of the same car in Meriden would save $80 a year, and those with older cars would save less.

As Republicans continued to call for budget cuts, the social service advocates gathered on the second floor of the Capitol outside the House Democratic caucus room in hopes of blocking any additional cuts. They want the two-year, $40 billion state budget to remain the way it was when it was passed.

“If there are additional cuts from the budget that was passed and negotiated, it will be very problematic” for human service providers and clients, said Heather Gates, president of Windsor-based Community Health Resources, a mental health agency. Gates said a reduction in spending would affect her organization’s ability to provide services.

Gov. Dannel P. Malloy wants to roll back some taxes in the budget that were opposed by major corporations, such as Aetna and Travelers. The governor is also asking the legislature for increased authority to cut 1.5 percent of the budget in various categories that would amount to more than $200 million overall.

Liberal Democrats, however, are generally opposed to more budget cuts beyond those already made in the passed budget. “Nobody is on board with the Malloy 1.5 percent cuts,” said Rep. Peter Tercyak, D-New Britain, a leading liberal.

House Speaker Brendan Sharkey of Hamden said changes to the budget have not yet been finalized and are still being crafted. He said he couldn’t say whether he has the votes to pass the package.

Republicans said the budget should be reformulated from scratch.

“Now is the time to step up to the plate and do the right thing,” said House Republican leader Themis Klarides of Derby. “This budget is no good for our state, and [post-session budget bills] are not the place for expansive policy shifts, which is what we need.”

The middle class, Republicans said, would be hit by a $280 million tax increase over two years because the state sales tax of 6.35 percent would be imposed on clothing, shoes and sneakers under $50 per item starting on July 1. In addition, the popular back-to-school sales tax holiday in August will be limited under the budget deal crafted by Malloy and the Democratic-controlled legislature. The tax-free holiday previously applied to items up to $300, but now would only be for items up to $100.

The already passed budget, which Malloy has not yet signed, also calls for imposing the state sales tax on car washes, which would cost consumers an estimated $13.6 million.

“We like to call this an equal opportunity budget,” Klarides said at the news conference. “It equally hurts everyone from top to bottom, from businesses to the middle class and everyone above and below. … We can’t fix something that has so many holes in it. We must start from the beginning.”

Senate Republican leader Len Fasano of North Haven said that the outcry against business tax increases from major corporations like General Electric and Stanley Black & Decker was unprecedented.

“In the 12 or 14 years that I have been here, I have never seen a budget pass with such an outcry from A to Z, from every group that has had the opportunity to finally get their arms around this budget,” Fasano said. “This hurts everybody.”

Republicans complained again Tuesday that they had been shut out of the negotiations, as they have charged since they first started sending messages to Malloy before Christmas in an attempt to become more involved in the process. Sharkey did not offer much hope for the Republicans to be included in the talks, and said he expects the criticisms to continue.

“This is the role of the minority party,” Sharkey said. “The minority party does not have to make the tough decisions. They’re not the ones who have to be the adults in the room to actually pass a budget. They’re not responsible for having to pass a budget. The majority party is responsible for having to pass the budget and make the tough decisions that may be unpopular for some, but are necessary if we’re going to actually move forward. That’s the role they’re playing. That’s the role they’ve always played.”

At the same time that the state’s budget problems have been making headlines, Florida Gov. Rick Scott, a Republican, is coming to Connecticut on Thursday and Friday in an attempt to entice businesses to move their operations and headquarters to the Sunshine State. On Friday, he will speak privately to business leaders in Norwalk before speaking later with journalists.

Sharkey and other Democrats said they believe that Malloy has become a bigger target for Republican governors because he will become chairman of the Democratic Governors Association next year.

“I don’t think there is any coincidence with the fact that all of the governors who have expressed interest in raiding Connecticut’s businesses are all Republican governors,” Sharkey said.

“There is not a coincidence, either, with the fact that our governor has taken on a higher profile nationally as the incoming chair of the Democratic Governors Association. When you put those things together, doesn’t it make sense that Republican governors are salivating at the opportunity to pile onto a Democratic governor with a higher profile? It’s all politics, and that’s what I think these guys are doing.”