The details of a two-year, $40 billion budget deal were still in flux Monday night as legislative leaders debated changes to the tax package in order to get more Democratic lawmakers on board.
House Majority Leader Joe Aresimowicz said there’s nothing unusual about the amount of time it’s taken to get a budget bill called on the floor of the House. However, as of 10 p.m. there was no indication it would be called Monday.
“We’re ensuring all the points we agreed to are accurate,” Aresimowicz said. “…It’s an ever-morphing document.”
Sources say the House Democrats are struggling to get the votes for the tax package. All it would take are 11 Democrats to join the 64 Republicans in voting against the budget.
House Minority Leader Themis Klarides, R-Derby, said she’s not surprised that it’s taking a little longer to convince Democratic lawmakers to vote for the package.
“Four years ago we passed the highest tax increase in the state’s history,” Klarides said, adding that anybody who votes for the state budget negotiated by Democratic legislative leaders and Gov. Dannel P. Malloy will be voting for the “second highest tax increase.”
Three large corporations, GE, Aetna, and Travelers issued statements Monday in opposition to the state budget. At least two of the three threatened to leave the state if the tax package was approved.
Klarides said it’s not unusual for lawmakers to hear from businesses who are getting ready to pack up and do business in a different state, “but at a certain point they’re actually going to leave.”
This budget with more than $282 million in corporate tax increases and a total of $720 million in tax increases in the first year “is the straw that broke the camel’s back,” she said.
Klarides said anyone who votes for this budget “assumes a very big risk” when it comes to getting re-elected.
In addition to the increase in the business taxes, there was concern expressed by lawmakers about the impact of the budget deal on the middle class, which faces $237.8 million in tax hikes in the first year.
First, the budget would reduce the property tax credit for homeowners to bring in an additional $100 million each year.
“We just can’t afford to do this to them,” Sen. L. Scott Frantz, R-Greenwich said. “They shoulder so much of the burden.”
In addition to the reduction in the property tax credit, the budget eliminates the sales tax exemption for clothing and footwear under $50 and reduces the per-item exemption during the sales tax free week from $300 to $100. This is expected to bring in an additional $137.8 million.
Further, the budget deal calls for the elimination of sales tax exemptions for car washing and parking. These changes are expected to bring in an additional total of $12.9 million.
Rep. Diana Urban, D-North Stonington, said she thinks the property tax reduction is “a very big concern.”
Legislative leaders were still behind closed-doors Monday discussing the budget and making changes.
“I think there are a lot of things in this budget that they’re trying to balance,” Urban said Monday afternoon. “It’s been a Herculean effort, but there are certain things that really resonate, and I think this is one of them. So I’m hopeful that they’re going to be able to make that change.”
Aresimowicz said the property tax reduction has been discussed a lot and will be discussed until the budget is called for a vote. He said there are just two or three issues that aren’t buttoned down in the tax package.
House Speaker Brendan Sharkey said that as soon as they receive the budget language back from their lawyers they will run the budget. He said there are some small changes being made that may require lawmakers to caucus parts of the budget again before a vote.
Malloy’s spokesman Devon Puglia maintained Monday that “the vast majority of households will see property tax relief as a result of the agreement.”
He added that “we’ve held the line to protect the middle class, while our wealthiest — millionaires and multi-millionaires — will pay their fair share, and it will all culminate in transformational improvements to our state.”
Elizabeth Regan contributed to this report.
