Sen. Boucher, Sen. Hwang, Rep. Lavielle, and Rep. O’Dea, Join to Release Revised No-Tax Increase Budget

September 13, 2017

HartfordToday, State Representatives Gail Lavielle (R-143) and Tom O’Dea (R-125) joined together with State Senators Toni Boucher (R-26) and Tony Hwang (R-28) to release a revised, two-year state budget proposal with no new taxes that would put a stop to the governor’s executive order, restore funding for education and core social services, and provide stability for towns and cities.

The revised budget proposal offered by Senate and House Republicans includes no tax increases and rejects the governor’s proposal to shift teacher pension costs onto towns and cities that would further burden municipalities and lead to increased property taxes. The Republican budget proposal combines elements of the Senate and House Republicans’ multiple prior budget proposals released earlier this year, feedback from Democrat lawmakers and the governor, and factors in the legislature’s passage of the state employee labor concessions deal that is now law.

“This is a detailed, balanced budget that is ready to be debated and approved by the legislature at any time, and it proves that raising taxes on Connecticut families is not the only answer to resolving our fiscal crisis,” said Rep. Lavielle.  “After the devastating effects of two record-high tax increases in the past six years, it is necessary to take a new approach to the state budget that does not lead to massive property tax increases by passing costs along to towns. Because my colleagues and I have listened to our constituents, we will not support any budget that increases their tax burden either directly through a sales tax, or indirectly by eliminating municipal aid from town budgets and billing towns for teacher pension costs. Our constituents want a budget that does not increase taxes, that preserves education funding, that makes transportation a priority, and that protects social services for the truly needy. That is why we felt it was our responsibility to provide a proposal that achieves all these things, to release it on time, in April, and to continue to update it ever since. Our budget sets a new direction for the state, one that will create sustainability and predictability for families, businesses and towns, and will go a long way towards restoring the economy.”

“The plan we unveiled today is another example of positive, responsible budgeting at a time when our state continues to struggle under massive debt and pension liabilities created by decades of failed fiscal and management policy,” said Rep. O’Dea. “I stand with my colleagues and our commitments not to raise taxes while preserving essential services for those that need them most.”

“Governor Malloy’s union concession deal left legislators with fewer opportunities to create a responsible, balanced, no-tax-increase state budget, but we were still able to draft a proposal that takes care of municipalities without forcing them to take on state debts. It also provides funding so that all of Connecticut’s children receive a good education and our neediest residents get the care and assistance they need,” said Sen. Boucher. “This is a lean budget, but it is a compassionate budget that does not raise taxes and makes the changes to state government that are sorely needed. I am proud to stand with my colleagues in support of this state budget.”

“Republicans have a detailed solution to move Connecticut in a new, sustainable, predictable direction,” said Sen. Hwang.  “Our Republican proposal contains no new taxes, reduces taxes for retirees, and restores funding for local education.  It protects property taxpayers while restoring funding for core social services for our neediest residents.  Our line-by-line plan provides property tax and educational funding stability for towns and cities while making structural budgetary changes such as an enforceable state spending cap, voting on labor contracts and effective bond cap.  We also prioritize progress to upgrade and innovate our transportation infrastructure.  All of this will generate a predictable, sustainable and transparent ecosystem where Connecticut businesses can thrive and grow.  Time is of the essence to protect our communities and our most vulnerable and at-risk residents.”

No New Taxes

The revised Republican budget contains no new taxes. It does not increase or expand the sales tax, hospital tax or income tax. It also rejects the governor’s proposal to shift teacher pension costs onto municipalities as such a policy change would likely result in property tax increases.

Reduces Taxes

The Republican budget enacts two policies that will reduce taxes for retirees by phasing in a tax exemption for Social Security and pension income for middle income families. In addition, the Republican budget also restores the entire $200 property tax credit for all qualifying families and individuals. Under Governor Malloy’s tenure this tax credit has been reduced from $500 and we believe that property owners deserve a break on their taxes.

Increases Education Funding

The Republican budget rejects the governor’s devastating education cuts contained in his budget proposal and executive order entirely. It instead includes a fully revised Education Cost Sharing Formula that takes into account factors regarding recent court decisions, enrollment, poverty, wealth and number of English Language Learners, among other factors. This budget dedicates $33.6 million more to education in FY 2018 and $136.6 million more in FY 2019 and phases in a new formula over 10 years. It also establishes a council to analyze and make any necessary changes to the new formula within the next year if deemed necessary.  In 2018 all towns and cities’ base ECS grant will either be held harmless or gain more funding.

Municipal Support and Mandate Relief

This budget provides predictable municipal aid so that towns and cities know what they can count on from the state. This plan does not ask towns and cities to pay for teacher retirement costs as the governor’s proposal does.  It also implements significant mandate relief for cities and towns to help municipalities achieve efficiencies and pass savings on to taxpayers.

Funds Core Social Services

This revised budget maintains Republican proposals to restore funding for core social services and programs that benefit people most in need. It fully funds day and employment services for individuals with intellectual and developmental disabilities, reopens Care4Kids, protects funding for SAGA that supports disabled residents who are unable to work, funds school based health clinics and family resource centers, restores funding for mental health services among many other programs.

Prioritizes Transportation

The Republican budget recognizes the importance of a safe, modern transportation system to public safety and economic growth throughout our state. Therefore, this budget prioritizes the state’s transportation needs and stabilizes funding without tolls or new taxes. It implements the Republican “Prioritize Progress” transportation funding plan and stabilizes the state’s Special Transportation Plan by dedicating transportation-related revenues to fund transportation needs and protects monies in the state’s Special Transportation Fund from being diverted for other uses.

Supports Seniors

The Republican budget lowers taxes for retirees by immediately eliminating the tax on social security and phasing in an elimination of taxation of pension income for single filers with an AGI below $75,000 and joint filers below $100,000. It also helps seniors age in place by restoring funding for core programs such as Meals on Wheels, the personal needs allowance, non ADA dial a ride, and the CT Home Care Program.

Employment and Day Opportunities for the Intellectually Disabled

The Republican budget fully funds employment and day opportunities for new high school graduates over the biennium, and it does not carry forward reductions imposed by Governor Malloy to employment and day opportunities services for the intellectually disabled.

Funds State Parks & Tourism

Acknowledging the multiplier effect that tourism has on our economy, the Republican budget proposes to transfer 1.5% of the current hotel occupancy tax to a new Marketing, Culture and Tourism account. This is not a new tax as Democrats have proposed. Rather, it dedicates a portion of the current tax for its intended purpose to boost tourism funding. This budget also implements the Passports to Parks program that has garnered bipartisan support in the legislature.

Reduces Size of Government

The Republican budget proposal includes overtime savings of 10 percent, a hiring freeze on non-24-hour non-union positions, and makes cuts to the legislature such as reducing the number of legislative committees. The budget also makes targeted spending cuts, 10 percent reductions to certain agency accounts, and rolls forward lapses made last year except for cuts to core services such as grants for mental health and substance abuse and youth service bureau funding.

Includes Structural Changes

In addition to balancing the budget over the next two years, this budget includes policy changes that roll out into future years to achieve significant savings. Changes include items such as a spending cap, bonding cap, municipal mandate relief, and other policy changes for long term savings. The budget also implements pension reform beginning after the SEBAC deal ends in 2027 that will result in some immediate savings as calculated in an actuarial analysis.