Winners and losers in revised state budget
Published 6:49 am, Thursday, July 2, 2015
HARTFORD — The General Assembly ended its anti-climactic budget-setting session early Tuesday in partisan politics, acrimony and big changes in the state’s property-tax structure.
The final 78-65 budget vote in the House of Representatives shortly after 1 a.m. was more solidly in favor of majority Democrats than the 73-70 ballot of June 3, but Republicans still slammed the revised two-year, $40.3 billion budget as anti-business.
They charged that dozens of pieces of new legislation, including new fees that were never the subject of public hearings in the regular legislative session, were jammed into the 686-page bill, bypassing the General Assembly’s traditional vetting process.
“It’s kind of like making something really bad just super-bad,” said House Minority Leader Themis Klarides, R-Derby, summing up a three-hour debate that consisted mostly of GOP criticism of the final budget document that sets the new fiscal year into motion at 12:01 a.m. Wednesday.
“I’m no economist, but I have a crazy idea,” she said. “Let’s not give this state the two highest tax increases in its history within four years of each other. Call me nuts.”
Businesses get some relief
Democrats said the adjustments since June 3, at the request of major corporations including insurance giant Aetna and Fairfield-based General Electric, illustrated their ability to be flexible.
"This was a difficult budget with no easy or popular decisions,” Gov. Dannel P. Malloy said. “But listening to many communities across the state, from business to nonprofit to our municipalities, I believe we have a budget that helps deliver prosperity for the future. Working together, we made the difficult choices necessary to put Connecticut on the long-term path to success, while making major investments in transportation as well as providing car and property tax relief.”
Malloy signed the budget Tuesday.
A 3 percent data processing tax was reduced to help businesses that contract out much of those services; a so-called unitary tax on corporate headquarters was delayed until next year.
Lower car taxes ... for some
Republicans charged that the budget creates $1.9 billion in new taxes and fees over the two-year budget cycle, while Democrats contend the revenue hike is about $1.3 billion.
The centerpiece of what Democrats call a “transformative” budget is a change in municipal aid, through a recalculation of payments to cities and towns that host tax-exempt colleges and hospitals, as well as the option to cap local motor vehicle taxes at 32 mills next year and 29.36 mills thereafter. New Haven, Bridgeport and Hartford residents would benefit the most from the car-tax cap.
High taxes for the wealthy
It will also create a three-tiered formula for the 10 communities with the highest rate of tax-exempt properties, and raises taxes on the state’s highest earners.
In the first year, 46 percent of state car owners will experience a property tax reduction, with 56 percent in the second year, Martin M. Looney, D-New Haven, predicted.
More than 35 percent of that relief will go to businesses, Looney said. He dismissed some national surveys that rank Connecticut low on scales of business-friendliness, because many others, particularly in the South, are right-to-work states with weak union movements. Looney vowed not to “undermine” union membership.
Two Senate Democrats voted against the budget revisions, Sen. Paul Doyle of Wethersfield and Sen. Joan Hartley of Waterbury, reprising their June 3 ballots. In the House, where 11 Democrats voted against the June 3 package, two sided against Democratic leadership Tuesday.
Republicans said the plan to take revenue from 1 percent of the 6.35 percent state sales tax and split it between the state’s transportation fund and municipal aid means wealthier communities will find their taxes redistributed to poorer urban areas.
Outnumbered in the House 87-64 and in the Senate 21-15, GOP lawmakers complained they were shut out of the budget process, despite presenting their own spending package during the session.
Raises for some
Senate Minority Leader Len Fasano, R-North Haven, chastised Democrats for approving $1.5 million in raises for executive branch employees, while cutting $800,000 from the budget for helping to bury indigent state residents. The budget reduces the current $1,800 individual benefit to $1,400.
“The budget that was approved by the majority in this Legislature is shameful, horrific and reckless,” said first-term Rep. Laura Devlin, R-Fairfield. “It reinforces that we are not listening to the people and the businesses in this state. Passing this bill as is, is nothing short of irresponsible and it is a serious blow to the future of our state.”
Rep. Terrie Wood, R-Darien, introduced an amendment, which failed along party lines, that would have equalized an additional $13 million in pay raises and benefit enhancements for nursing home workers.
“It just seems patently unfair,” said Wood, pointing out that workers in 60 unionized nursing homes will split up to $9 million, while those in 170 non-unionized facilities will share a pool of about $4 million.
“I’d go so far as to say there’s a lot of pork in here,” said Rep. Mitch Bolinsky, R-Newtown. “Recognizably, many little bills that never made it out of their committees and never saw public hearings are sort of buried in here.”
Fines, grants, raises and new taxes
The bill includes dozens of sections, reviving issues that died June 3 when the regular legislative session ended. It includes:
a $9 million subsidy for Bridgeport’s planned thermal loop.
a phased-in prohibition on the sale of items called microbeads, tiny plastic pieces often used in skin treatments and exfoliates.
restrictions on pesticide use at municipal playgrounds.
expand the scheduled sales tax on car washes to include coin operations.
A plan that died June 3 to expand the state’s medical marijuana program to children was included in the legislation on the Senate calendar Monday, but was taken out in a late-breaking amendment.
Malloy’s Second Chance Society proposals, reducing first and second drug-possession offenses to misdemeanors, to reduce the prison population and the racial disparity in the justice system were passed. So was related legislation providing state funds to pay for body cameras for police officers and a policy on storage procedures for the video.
A new quasi-public Connecticut Port Authority, with a statewide harbor master appointed by the governor to administer the deep-water ports including Bridgeport.
The state Department of Transportation was given a mandate to improve the Danbury, New Canaan and Waterbury rail.
Klarides, in assessing the final day of a session that started Jan. 7, said she was sad with the result.
“There’s a lot of stuff,” she said in a sarcastic summation. “It should just be called the stuff. It’s not just stuff that we need to do, but stuff we don’t need to do, stuff we didn’t get done, stuff that people didn’t like, stuff that never got through committees, stuff that never had a public hearing. It doesn’t really matter if we like it or we don’t like it, but it doesn’t really have anything to do with the budget. I guess I just don’t get when we’re going to learn that what we’re doing does not work.”
But House Majority Leader Joe Aresimowicz, D-Berlin, in an impassioned retort, recalled the year’s budget process, in which Malloy introduced his proposal, including $600 million in spending cuts that was revised by lawmakers.
The negotiation between legislative Democrats and the Democratic governor created the June 3 budget that was revised in the face of corporate criticism.
“We’re responsive to some of the additional discussions that were happening outside of this chamber,” Aresimowicz said of the process to finalize the package. “I think today is an excellent demonstration in democracy.”
He warned that critics can create “a chilling effect” on the state. “When we twist studies or tax groupings and do this to paint the picture that we want to paint to make it look like gloom and doom, that’s what we’re going to get,” he said.