(Updated) Filled with pierogies and after a pep talk from Gov. Dannel P. Malloy the House’s Democratic majority gave final passage to a budget that raises $2.6 billion in taxes over the next two years. It’s one of the earliest budget votes in recent memory, but it doesn’t include the more than $2 billion in labor concessions Malloy needs to get from state employee unions to balance it.
The House passed the budget 83 to 67 after 10 hours of debate. Fifteen Democratic lawmakers joined their Republican colleagues in voting against Malloy’s inaugural budget. The Senate passed the budget 19-17 early Tuesday morning.
Republican lawmakers said the vote proves there isn’t wide spread support for a budget that increases taxes too much and cuts too little spending. Democrats countered that it’s a balanced approach to next year’s $3.3 billion budget deficit.
Democratic Reps. Linda Schofield, Paul Davis, Kim Fawcett, Mary Fritz, Claire Janowski, Ed Jutila, Steve Mikutel, Frank Nicastro, Jason Rojas, Richard Roy, Kim Rose, Dan Rovero, Jonathan Steinberg, Kathy Tallarita, and Chris Wright voted with 52 Republican lawmakers against the two-year, $40.11 billion budget.
The budget increases spending 2.8 percent in the first year and 2.3 percent in the second year. It raises taxes $1.4 billion the first year and $1.2 billion in the second and calls for $2 billion in labor concessions.
“This is the first Democratic governor in 20 years and his budget didn’t pass by a large majority,” House Minority Leader Lawrence Cafero, R-Norwalk, said. “Think about what that says.”
House Speaker Chris Donovan argued after the vote that he only needed 76 to pass it giving him a buffer of at least seven lawmakers.
“Now it’s up to my Administration to reach an agreement with our fellow state employees and to present it to the legislature for ratification,” Malloy said in a statement. “I remain hopeful that we’ll get there. If we don’t, I remain committed to presenting an alternative budget to the General Assembly in the next couple of weeks.”
The $2.6 billion, two-year tax increase “nickel and dimes the average taxpayer,” who is “holding on by their finger nails,” Cafero said. “There are a lot of lives in this state that will change forever” as a result of this budget he told his colleagues moments before the vote.
The budget increases the number of income tax brackets from three to six, and increases taxes starting on individuals making more than $50,000 a year from 5 percent to 5.5 percent. Couples and families making $200,000 a year, but not over $400,000 a year will see their rates climb from 5 percent to 6 percent. The wealthiest residents will pay 6.7 percent and all the income tax increases will be retroactive to Jan. 1, 2011.
The budget also increases the sales and use tax from 6 percent to 6.35 percent, imposes a 3 percent cabaret tax on venues hosting musical events or entertainment, increases the alcohol tax to 20 percent, and eliminates the sales tax exemptions on clothing under $50, yoga studios, yarn, and smoking cessation products, to name a few.
The budget doesn’t include the $2 billion the governor expects to get from labor unions. Republicans argued the changes made to the language, which initially gave the Malloy administration control to cut $1 billion from the budget if negotiations failed, wasn’t strong enough. They argued the legislature should not only be permitted, but required to return to approve either a concession package or spending cuts.
Republicans continued to argue Connecticut should be following the lead of other state’s, that recently passed budgets without any tax increases.
The Republican’s no-tax-increase budget, which was offered as an amendment and defeated along party lines, is built from the perspective “of those we represent,” Cafero said.
Republicans asked more than once how they were supposed to justify a tax hike to their constituents and suggested the Democrats should consider the question as well.
Folks watching at home will likely be scratching their heads and saying, “Isn’t it a shame they couldn’t meet somewhere in the middle,” Cafero said.
Even before the alternative budget failed, Cafero said he was a political realist and admitted that his amendment would not be adopted by the majority. But he said his party had an obligation to show that there was another way to balance the state’s budget.
“I ask you to look at it and think what could have been if we looked at this budget the same way we started this session,” Cafero told his colleagues in the House.
Majority Leader Brendan Sharkey, D-Hamden, said the Republican budget doesn’t change how the state does business. He said the Democratic budget really changes how the state does business by balancing a budget without gimmicks and making sure the state’s long term obligations are funded.
“We can’t close a $3.3 billion deficit without some reasonable tax increase,” Sharkey said. “It belies the reality we’re facing.”
He said governors not raising taxes in other states are balancing their budgets on the backs of local cities and towns, which are forced to increase taxes in order to make up for the cuts in state funds. He said Connecticut couldn’t take that approach because it’s reliance on the property tax is greater than surrounding states like New York and New Jersey.
“The governor is asking everyone to make sacrifices. He isn’t asking one group of people to bear a burden that he doesn’t think they can bear,” Roy Occhiogrosso, Malloy’s senior communications adviser, said Tuesday afternoon. “The alternative is one of two things: to go back to playing the financial games that got us into this mess or to go down the road with an alternative budget that will shred the safety net and lay thousands of people off.”
Malloy was uncertain earlier Tuesday morning about the haste at which he will sign the budget, but under the rules of immediate transmittal he has five days from passage. Layoff notices will be going out to certain employees later this week and his negotiator is still talking with the State Employees Bargaining Agent Coalition about savings and concessions.