Connecticut budget passes by slim margin

By Westfair Online

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BY KEN DIXON
Hearst Connecticut Media

The state Senate nearly melted down into an acrimonious parliamentary showdown late Wednesday, but with minutes before the midnight deadline, Democrats put the finishing touches on the two-year, $40.3 billion budget.

Minority Republicans were on track to filibuster the budget through the deadline, kill the entire controversial package and force a special session. But as Senate President Martin M. Looney was about to call the question, Senate Minority Leader Len Fasano called a halt to the stalling tactic. The budget passed 19-17, with two Democrats voting against it. It heads to Gov. Dannel P. Malloy for final review.

“Don’t give us a budget five hours before we vote,” said Fasano, R-North Haven, who complained that Republicans were shut out of the budgeting process.

The vote came 13 hours after the spending package squeaked by in the House of Representatives by a 73-70 count, with 11 Democrats voting against the final bill at 10:30 a.m., before the bleary-eyed House members recessed until midafternoon.

At 5:30 p.m., after voting on several bills supported by House Democrats, the Senate began the debate to finalize the budget before the 12:01 a.m. Thursday legislative adjournment deadline.

The budget includes a 50-cent increase per pack in the cigarette tax over the two-year budget that starts July 1, and it adds taxes on corporations and Connecticut’s wealthiest earners.

The budget that starts July 1 is $19.8 billion, and the second year is $20.5 billion.

Republicans warned Democrats would raise taxes by another billion-and-a-half dollars just four years after the record tax hikes of the governor’s first year in office.

“This budget is an attack on the middle class,” said Rep. Jason Perillo, R-Shelton. “A failure to listen is a failure to lead.”

“What we forget is, if you’re wealthy enough to pay more taxes, you’re wealthy enough to live somewhere else,” said House Minority Leader Themis Klarides, of Derby. “What we’re doing is not working.”

Rep. John Frey, R-Ridgefield, whose conversation with a General Electric executive last weekend resulted in a snowball of corporate criticism against the budget proposal and nearly scuttled the legislation this week, warned of the potential backlash.

“What we do today here on this amendment in particular, I think, can have cataclysmic damage to the state of Connecticut,” he said of the Democratic proposal that ultimately prevailed in the House.

Corporate tax at issue

Amid opposition from major corporations including GE, The Travelers Cos. and Aetna, Democratic leaders and Malloy’s staff tweaked their plans only slightly Monday and Tuesday. But they did not back away from a planned increase in taxes on corporations with headquarters in Connecticut that is projected to raise about $62 million over the two-year budget cycle.

They revised a planned increase of sales and use taxes on computers and data processing. Instead of increasing it immediately to 3 percent, the bump is to be phased in from the current 1 percent to 2 percent on Oct. 1 and to 3 percent on July 1, 2016.

By 7:45 a.m. Wednesday, the first House Republican attempt to change the package failed 82-60 with nine members missing. It would have restored some funding for state hospitals and eliminated a new 6 percent tax on ambulatory surgical centers.

“We’ve got them in a corner,” said Rep. Dan Carter, R-Bethel, in defense of state hospitals. “They’re not able to hire that extra nurse practitioner. They’re not able to hire that extra physician’s assistant. At Western Connecticut Health Systems, we’re going to lose jobs. We’ve got to stop hammering them.”

Most Democrats were quiet during the debate, as Republican amendments were proposed, supported by GOP lawmakers, then voted down handily in the chamber, which is controlled by the majority, 87-64.

At the end, House Majority Leader Joe Aresimowicz, of Berlin, chastised critics and the business community.

“Is it all roses and rainbows and everybody is happy about it? No, we’re not,” Aresimowicz said, stressing the budget restores funding to people who need social services and depend on programs of the Department of Developmental Services that were cut under Malloy’s original budget proposal in February. “I’m going to feel a little bit bad when I press that button, but when I go out into the hall and see the faces of the people we’re helping in this state, I know that it’s worth it and that’s what we stand for. That’s what we continue to stand for, and when I go back to my district, I’ll be proud to say it.”

Aresimowicz said while he is sympathetic to the complaints of companies that include Fairfield-based GE, big corporations need to help support government.

“They pay zero taxes,” he charged, seconds before the final House vote. “Zero state and federal taxes. We go after GE for one moment and it’s ‘Oh, they’re going to leave the state of Connecticut.'”

The threat of departure

First-term Rep. Cristin McCarthy Vahey, D-Fairfield, who lives two miles from GE’s sprawling headquarters, said she voted against the legislation because she wants Connecticut companies to remain and help the state’s economic growth.

“GE doesn’t tend to be an alarmist type of company, so I want to listen,” McCarthy Vahey said in an interview on the House floor. “I also recognize for us in Fairfield County that GE has been the source of a lot of jobs. Those folks who work there pay a lot of taxes into our economy.”

Democratic leadership did not pressure her to support the budget, she said.

The budget cuts $600 million from existing services in the first year and $860 million in the second, with a two-year average spending increase of 3.5 percent.

One percent of the revenue generated by the state’s 6.35 percent sales tax is to be split between transportation infrastructure investments and municipal aid. Cities and towns have the option to cap the tax rate on local car taxes at 32 mills in the first year, with the state making up the difference.

Hearst Connecticut Media includes four daily newspapers: Connecticut Post, Greenwich Time, The Advocate (Stamford) and The News-Times (Danbury). See newstimes.com for more from this reporter.

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