Connecticut lawmakers plan to vote Monday on $40B budget [FOX CT]

June 2, 2015


HARTFORD — Rank-and-file Connecticut lawmakers will learn more Monday about a tentative two-year budget agreement reached between Gov. Dannel P. Malloy and the General Assembly’s Democrats that increases some corporate and income taxes, scales back other proposed tax hikes and dedicates part of the sales tax to rebuilding the state’s transportation infrastructure.

A vote on the proposed $40 billion fiscal package, agreed upon earlySunday morning by the budget negotiators, was also expected Monday. The anticipated vote comes as the General Assembly faces a Wednesday midnight adjournment.

The budget deal stirred strong reactions.

Senate Minority Leader Len Fasano, R-North Haven, referenced how Malloy, a Democrat, repeatedly said during his recent re-election campaign that he wouldn’t increase taxes.

“Despite what we have been promised, despite the rhetoric we have heard from the governor, Connecticut is putting a damper on potential for job growth and fiscal stability,” Fasano said. “This budget represents broken promises and a complete disregard for the warnings made very clear over the past few months. Connecticut cannot afford new taxes.”

Devon Puglia, a spokesman for Malloy, stressed that middle class taxpayers won’t be affected by the proposed tax increases. The proposed income tax increase would affect only high wage earners.

“We’ve held the line to protect the middle class, while our wealthiest – millionaires and multi-millionaires – will pay their fair share,” he said.

But Joseph Brennan, CEO of the 10,000-member Connecticut Business and Industry Association, contends the budget proposal “clearly sends Connecticut down the wrong path.” Brennan said he’s been told by lawmakers the bill includes numerous tax changes for businesses, including an increase in the tax on computer and data processing services, limits on tax credits, a complicated tax reporting system for Connecticut corporations with a presence outside the state and continuation of a surcharge on the corporation tax.

Brennan said the state’s business climate continues to be viewed poorly nationally, Connecticut lags the nation in job recovery since the last recession and the state boasts the highest unemployment rate in New England.

“Why lawmakers would want to make things much worse at this time, it’s just something I don’t understand and that they’re going to have to explain to their constituents,” he said. “It just makes no sense to me.”

In a statement Sunday, the administration touted the budget agreement and said the plan would ultimately lead to the largest investment in transportation in Connecticut history. Even though Malloy recently formed an advisory commission to spend the summer coming up with ideas for funding his proposed 30-year, $100 billion transportation overhaul, the budget deal comes up with some of the money. It sets aside half of 1 percent of the 6.35 percent sales tax to pay for transportation needs.

“This funding will mean that transportation will be fully funded for nearly a decade, allowing the state to plan and design projects in Governor Malloy’s long-term vision, as well as funding to complete many of them,” a statement from the governor’s office said.

Puglia said the sales tax revenue will help shore up the state’s Special Transportation Fund, which officials have predicted would eventually be insolvent.

The Democratic budget agreement also authorizes the Connecticut Lottery Corporation to begin offering the gambling game keno to its 3,000 retailers and potentially 600 new retailers that run bars and restaurants. The lottery’s president has estimated the game could generate possibly $25 million in gross revenues in the first year, $50 million in the second, $70 million in the third and perhaps more in the future.

The deal does not extend the state sales tax to numerous services, including veterinary and accounting, as first proposed by the legislature’s Democratic controlled Finance and Bonding Committee. It also does not include a proposed 2 percent supplemental tax on all capital gains income for wealthier taxpayers.