Political Capitol

Brian Lockhart covers the Connecticut General Assembly in Hartford

Archive for March, 2009

Unitary tax

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A source at the capitol said there is talk legislative Democrats Thursday will propose a unitary tax on corporations as a highlight of their two-year budget proposal and one means of addressing the gaping budget deficit.

There are a lot of rumors about what taxes the Democrats want to raise or what tax exemptions they want to eliminate.

Senate President Donald Williams, D-Brooklyn, managed to attend yesterday’s legislative breakfast of the Business Council of Fairfield County WITHOUT being pinned down on any changes to business taxes.

Other decision-makers say they are still putting the revenue portion of the budget together.

Sen. Eileen Daily, D-Westbrook, a co-chairman of the Finance, Revenue and Bonding Committee, joked “anything is likely, not likely, or maybe.”

But she added: “A unitary tax is something we have looked at and considered in the past … What we said at the beginning of this year is everything’s on the table and there are no sacred cows.”

Daily did say she thought the sales tax exemption for manufacturing equipment was pretty safe.

I put in calls to the Connecticut Business and Industry Association to see if members had heard anything about a unitary tax getting some traction.

Nancy Andrews, a CBIA spokesman, noted there was a bill introduced earlier this year for a unitary tax, so it would not be completely out of the blue if it showed up in the Dem budget.

So THAT’S why the Democrats want more control of stimulus spending

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Last week I wrote about a bill, proposed by Senate Majority Leader Martin Looney, D-New Haven, that would essentially provide the Democratic-majority General Assembly a greater say in how the state distributes federal stimulus money.

Currently that power, as outlined in the federal stimulus regulations, lies with Republican Gov. M. Jodi Rell.

She in turn organized a working group to help prioritize which proposals get the cash.

Democrats have complained the working group is top heavy with staff from the Governor’s office and the legislature’s four appointees (one for each caucus) have little to no authority.

Perhaps the Democrats are also envious of the automatic PR boost Rell gets from holding the stimulus purse strings. Practically ever day now her office sends out e-mails (both general and those tailored to a specific city/town) announcing the release of stimulus grants for local and state-wide projects.

Senate President gives Fairfield County biz leaders a talkin’ to

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Senate President Donald Williams, D-Brooklyn, was sort of tossed to the lions today when House Speaker Christopher Donovan, D-Meriden couldn’t join him at the Business Council of Fairfield County’s legislative breakfast.

There’s already a general impression among many folks and businessmen/women in Southwestern Connecticut that Democratic leadership in Hartford sees the region as nothing but a giant piggy bank filled with tax revenues.

So put Williams, who is notoriously liberal and progressive, on a panel that includes the legislature’s two Republican leaders – both from Fairfield County – in front of a room full of Fairfield County business types, and he’s outnumbered.

House Minority Leader Lawrence Cafero, R-Norwalk and Senate Minority Leader John McKinney, R-Fairfield took plenty of opportunities to complain about how they feel the state is unfriendly to business and too often proposes and passes legislation that interferes with business.

Some in the audience quietly nodded their heads in agreement and at one point Cafero even got some of the morning’s rare applause.

But then the moderator asked the panel a question from the audience – how are lawmakers going to improve the economy and help businesses?

Williams, his voice rising, took the opportunity to vent his frustrations at the irresponsible Wall Street crowd that helped plunge the nation into economic turmoil.

He said businesses cannot on the one hand ask government to be hands-off and then ask for government help when the economy goes south.

“These things don’t add up,” Williams said. “If folks are interested in the one there’s got to be some accountability.”

He said that lack of accountability is what got the state and nation into the current economic crisis.

“Yes there are areas where government should not be intrusive,” Williams said. “But there’s got to be accountability going forward.”

He never answered the actual question, but I suspect it was a satisfying moment for Williams.

Unlike Cafero, he didn’t get any applause.

Hmmm. I wonder why Fairfield County businessmen and women are so concerned about marijuana laws?

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The Business Council of Fairfield County held its annual legislative breakfast this morning.

Senate President Donald Williams, D-Brooklyn, Sen. Minority Leader John McKinney, R-Fairfield and House Minority Leader Lawrence Cafero, R-Norwalk spent time fielding questions from Joe McGee, the council’s vice president of public policy.

As expected much of the discussion focused on how lawmakers intend to deal with the state’s fiscal crisis and two year budget.

But near the end McGee asked the group their thoughts on a bill by Senate Majority Leader Martin Looney, D-New Haven to remove criminal penalities for possession of less than an ounce of marijuana (punishable by a maximum $1,000 fine and a year in jail).

McGee told the panel it was not a topic he’d planned to broach but three audience members submitted questions about it.

Perhaps the economic crisis has a lot of business folks smoking pot for a little relaxation after a stressful day of watching profits shrink and costs rise?

For the record, Cafero and McKinney both said they were against Looney’s bill, even though in tough budget times it could save the state $11 million in enforcement costs.

“I’m all for saving money,” Cafero said. But he said lessening penalities for marijuana use will only encourage school students to use it recreationally.

Cafero maintains this will hurt their education and, ultimately, cost the state money in the future.

“If we send the message possessing and using marijuana to that degree is not a biggee, we’re in trouble,” Cafero said.

Williams said he believes it is worth examining the issue. But he disagrees with Looney’s proposed fine of up to $121 for possession. Williams said that is not enough.

The penalty is currently a maximum $1,000 fine and one year in jail.

“I don’t disagree with Larry,” Williams said. “Maybe a significant fine versus criminal charges would be more appropriate.”

Legislative Democrats to release budget in one week

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Senate President Donald Williams, D-Brooklyn, today said the co-chairs of the Appropriations and Finance, Revenue and Bonding committees are on schedule to deliver a two year budget proposal next Thursday.

“This will be the first time Connecticut families will see what a truly balanced budget looks like,” Williams added, taking a shot at Republican Gov. M. Jodi Rell.

The Democrats and Rell have been going back and forth over the size of the state deficit. Rell’s no-tax-increase budget proposal, released Feb. 4, reflected a $6 billion deficit.

Yesterday her budget office revised that figure to $7.39 billion.

The Democrats are siding with the non-partisan Office of Fiscal Analysis, which estimates the deficit is closer to $8.7 billion.

Judging from the Democrats’ previous statements, tax increases are likely, although lawmakers have also acknowledged there is no way they can rely on tax hikes alone to dig the state out of such a deep fiscal hole.

Lack of communication in the state legislature

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It was hard to sit through yesterday’s hearing on the AIG bonuses and not be reminded of the controversy surrounding a bill from earlier this month to change financial oversight within Catholic parishes.

In the case of the latter, Republicans on the legislature’s Judiciary Committee were angry with their co-chairs – Sen. Andrew McDonald, D-Stamford and Rep. Michael Lawlor, D-East Haven – for having the bill drafted and a public hearing scheduled without a heads up.

Some Democrats weren’t all that pleased with McDonald and Lawlor, either.

The sometimes confusing and rushed legislative process basically caused the Judiciary Committee to vote in January to have several bills drafted without most members KNOWING they were backing that specific Catholic parish bill. So they were angry when news broke about the public hearing and they ALL started getting phonecalls and e-mails from furious Catholics and other constituents.

Ultimately Republicans on the Judiciary Committee confronted McDonald and Lawlor during a meeting a week ago, all asking the same question – “Why keep us in the dark?”

A similar situation played out yesterday, with Republicans on the Banks Committee attempting to grill co-chairs Sen. Bob Duff, D-Norwalk and Rep. Ryan Barry, D-Manchester, on why they went ahead and subpoened 14 AIG employees, including the company’s CEO, without speaking to the minority party.

Many complained they first learned of the subpoenas through the media and were frustrated the stories portrayed it as a decision by the full Banks Committee and not just the co-chairs.

“I was wondering why we weren’t notified to what was happening and had to read about it in the paper?” Rep. John Harkins, R-Stratford, asked Duff and Barry. “I just found myself at a loss.”

It was an uncomfortable few minutes, with Duff and Barry finding parliamentary procedures to avoid talking about the matter while at the same time stating how they believe there has always been good, bi-partisan communication on the Banks Committee.

Just as McDonald and Lawlor technically had the power to draft the Catholic bill, Duff and Barry had the right as co-chairs to issue subpoenas without consulting their colleagues.

But was that the best way to go about it?

I asked Duff and he said there wasn’t time to schedule a full Banks Committee meeting to discuss the issue.

But how about sending out an e-mail or making a phonecall, if not to ALL committee members, then the two ranking Senate and House Republicans? I can’t imagine it would have stopped the subpoenas from going out. It might not have convinced the GOP to support the move, but it would have avoided some of the back-and-forth that occurred yesterday over who knew what when and why.

What I suspect is there is just a lot of distrust at the capitol between the two parties.

The Democrats instinctively believe that if they share anything before hand with the other side, the Republicans will try to sabotage whatever they’re working on or at least make a public fuss early on to try and suck the wind out of it.

And there’s nothing to say if the Republicans were in the driver’s seat they wouldn’t be pulling the same maneuvers. That’s the chess game of politics.

And certainly the Democrats have reason to feel like they can do whatever the heck they please. Voters have not only returned them to power over the years but increased their numbers in the General Assembly on Election Day despite having popular Republican Gov. M. Jodi Rell at the top of the GOP ticket.

But you have to wonder if the average resident who is not involved in and doesn’t care about the insider-baseball and political intrigue at the capitol has been reading over the past few weeks about these communication skirmishes and wondering “what’s wrong with these people?”

Rell budget director to Office of Fiscal Analysis: You guys couldn’t calculate yourselves out of a paper bag!

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While most of the capitol was focused on the Banks Committee’s hearing on the AIG bonuses today, Republican Gov. M. Jodi Rell and state budget czar Robert Genuario of Norwalk slipped out a significant press release.

The two announced that they now believe state revenues have deteriorated to the point the projected budget deficit for the 2009-10/2010-11 fiscal years is $7.39 billion, not $6 billion.

On a quieter news day this would have been big, since anyone paying attention to the budget process knows Democrats for months have accused the Rell administration of low-balling the size of the deficit to score political points.

Quick synopsis:

1. Rell and Genuario early in the year say the deficit is likely nearing $8 billion.

2. On Feb. 4 Rell proposes a balanced, no-tax-increase two-year budget that accounts for a $6 billion deficit.

3. State’s non-partisan Office of Fiscal Analysis comes out with a projected deficit of $8.7 billion.

4. Legislature’s Democratic-majority cries foul, arguing Rell and Genuario low-balled the number so they could leave the drastic cuts and tax hikes to the other side of the aisle.

5. Genuario shoulders the blame, saying he made a mistake and it was repeated by Rell in the run-up to her budget address and $6 billion is the true deficit.

6. Repeat 1 through 5 a few times in press releases, interviews and news reports.

7. Legislature’s Republican Minority holds budget forums using $8.7 billion number.

8. Dems say “Aha Governor!!! You Have No Clothes!!!”

9. Rell and Republicans tell Democrats to stop gripin’ about the size of the deficit and just propose SOMETHING that starts to deal with it.

Which leads to today. In the press release announcing a new deficit projection of $7.3 billion, Genuario states: “Frankly these revenue deteriorations are not altogether surprising given the worsening national economy and steep drop in almost every leading economic indicator over the last two months.”

He concludes: “While the numbers are deeply concerning, we still believe that our two year projected deficit will be FAR BELOW (emphasis mine) that projected by the Office of Fiscal Analysis.”

The Office of Fiscal Analysis issued a statement its staff will meet Genuario and his gang outside behind the capitol by the flag pole when the bell rings. And NO CALCULATORS ALLOWED. Or brass knuckles.

Bob Duff + AIG subpoenas = Geraldo + Capone’s vault?

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House Minority Leader Lawrence Cafero, R-Norwalk, has been critical of the decision by Sen. Bob Duff, D-Norwalk, a Banks Committee co-chairman, to subpoena lower Fairfield County residents thought to have gotten a piece of the AIG bonus pie.

It was announced today the Banks Committee has agreed to instead allow AIG to send an executive – the head of human resources – to provide testimony and further data on the bonuses at a hearing tomorrow.

Cafero is skeptical the hearing will shed any additional light on the controversy.

“I’m very hopeful this isn’t our legislative version of Geraldo Rivera and the Al Capone vault,” Cafero said. “We open it up, and there’s nothing.”

I do think it’s reasonable to at this point draw another comparison between the Banks Committee’s hearing and Geraldo’s vault show.

The latter was and perhaps still is the highest rated syndicated program ever.

Duff said he’s been getting calls from C-SPAN about broadcasting tomorrow’s hearing. I bet this will be the highest rated episode of the Connecticut Legislature’s Banks Committee EVER.

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