The debate in the House on language to implement the budget focused early Tuesday morning on what the state is doing to attract businesses.
The bill, which passed the House 78-65 around 1 a.m. Tuesday and the Senate 19-17 Monday night, includes $1.3 billion in tax hikes over two years, even though it canceled about $500 million in previously approved tax hikes. The Democrat-controlled legislature agreed with Gov. Dannel P. Malloy’s proposal to maintain the computer processing tax at 1 percent and delayed unitary reporting for multi-state companies to January 2016.
The business community opposed those two taxes and nine days after the General Assembly approved that budget, Malloy asked them to change it, which they did with a nearly 700-page bill.
The budget also cuts spending to social services by $25 million over the biennium, reduces by $13 million the money available for state employee raises, and reduces the public campaign finance account by $7.8 million. Lawmakers opted not to give Malloy the power to make unilateral spending cuts.
Rep. Chris Davis, R-East Windsor, said the Democratic majority is not fooling anyone with this budget.
“We still have over a $1 billion in tax increases,” Davis said. “Tax increases we were promised a few short months ago would not exist … because a deficit would not exist.”
Davis said the tax increases in the budget are not just on businesses—they’re on every taxpayer in Connecticut that owns property or buys clothing and footwear.
“Not a single thing in this document addresses any of those taxes that are impacting our middle class families,” he said.
Davis said this budget impacts him personally and makes him think about moving out of the state of Connecticut. He said that’s not the message he wants to send, but they’ve had three weeks to come together and develop a plan after getting feedback from businesses and taxpayers.
“We’re reducing state spending by one-tenth of one percent in this implementer,” Davis said.
He said the problem is that the state is spending too much.
House Minority Leader Themis Klarides, R-Derby, said she had a tough time explaining to the public exactly what they were doing in special session to implement the state budget approved on June 3.
“What we find is a lot of stuff,” Klarides. “It’s just full of stuff we didn’t get done. Stuff that people didn’t like. Stuff that never got through committee … Stuff that has nothing to do with the budget.”
She said she appreciates the changes that were made to the tax package, but instead of being “super bad,” it’s just “bad.”
Republican lawmakers did vote in favor of one of the amendments, which created a task force to study Connecticut’s tax policy and competitiveness.
Rep. William Tong, D-Stamford, said there were concerns raised by the business community about the implementation of the unitary reporting requirement and there’s a desire to have a commission look at that.
Republican lawmakers supported that amendment, even though they thought it was repetitive and duplicated efforts of other task forces created during the regular legislative session.
Klarides said instead of creating commissions they need to focus on tax policy and how that impacts business.
“Let’s not give this state the two highest tax increases in its history within four years of each other,” Klarides said.
House Majority Leader Joe Aresimowicz, D-Berlin, said lawmakers were responsive to the public and modified the budget as a result of those discussion.
”Today is an excellent demonstration of democracy,” Aresimowicz said.
