HARTFORD – The General Assembly’s vector with its midnight, June 3 adjournment hour is closing in and depending on the time of day, a budget deal is close, closer, or not.
Speaker of the House Brendan Sharkey thinks a compromise on the two-year $40-billion spending package can be reached with Gov. Malloy in time to meet the statutory deadline.
But it’s close enough to cause consternation in the business community and the Republican legislative minority.
Majority Democrats, for taxpayers keeping score at home, proposed spending $605 million more than the governor. So a settlement requires some give and take. Presumably, a broadening of the sales tax could be sweetened for the governor by throwing some cash at Malloy’s transportation infrastructure plans.
Sharkey and other legislative leaders and Malloy’s staff left the Capitol at about 3 a.m. Thursday after hours of back-and-forth. During a brief interview on the House floor, Sharkey said he’s optimistic that a deal is imminent.
Senate Minority Leader Len Fasano of North Haven House Minority Leader Themis Klarides of Derby this afternoon issued a release warning the imminent Democratic compromise includes keno, the continuous lottery game, as well as “multiple burdensome tax hikes.”
“We have a budget problem,” Klarides said. “But tax hikes are not the solution, because Connecticut is already overtaxed. 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.”
Fasano and Klarides believe that the onerous Democratic budget may still include:
- New taxes on two dozen different business services, including data processing, construction, veterinarians and accounting.
- The scuttling of a scheduled exemption of taxes on clothing udner $50.
- Reductions in the value of tax credits that could cost businesses an addition $76 million over the two-year budget.
- Increases in income taxes for some of the states’ top earners to bring in an additional $345 million in revenue.
Joe Brennan, president and CEO of the Connecticut Business & Industry Association, held an impromptu news conference with business representatives outside the Capitol Press Room this afternoon, warning that higher taxes are bad news.
“We keep talking about our business climate rankings being near the bottom nationally, our job growth lagging severely behind other states in the country and even in our region, we just think all these ideas, whether it’s sales tax, corporate tax changes, changes to the income tax, are not good ideas,” Brennan said.
George Logan, director of environmental management and government relations for Aquarion, the regional water company that has 230 employees and serves 50 towns and cities in Southwestern Connecticut, told reporters that a larger budget would create a “ripple” effect.
“The proposed tax increases can have a direct effect on our ability to attract investment here in Connecticut,” Logan said, stressing that Connecticut is water-rich. “We feel that focusing more on growing the economy and adding jobs will have a much better effect on the economy. We can be bringing businesses into Connecticut.”
Michael J. Riley, president of the Motor Transport Association of Connecticut, representing state truckers, said that he recently heard of a Democratic plan to drastically change the way corporate taxes would be reported. He warned that FedEx is currently negotiating with the city of Middletown to turn the former Aetna property into a large distribution center and that major tax changes and “anti-business proposals” could alter the deal’s landscape.
“I think it’s bad business,” Riley said.
Of course, the June 3 deadline is a soft one. That’s when legislation ends, but for those with memories back to 2008, or 1991, the year the personal income tax was adopted, if the adjournment date is missed, the General Assembly calls itself into special session. At that point its next deadline would be the start of the next fiscal year on July 1. Back in 2008, Democrats and Republican Gov. M. Jodi Rell battled into August.