After seeing what $922 million in spending cuts and 2,500 state employee layoffs looks like, labor unions and advocates are calling upon lawmakers to close the deficit with tax hikes.
A coalition of state employee unions, including Council 4 AFSCME and AFT Connecticut, launched radio and web ads Wednesday urging lawmakers to support higher taxes, instead of layoffs and budget cuts.
“Laying off public workers and slashing vital public services is a recipe for economic disaster,” Council 4 AFSCME Executive Director Sal Luciano said in one of the ads. “Now more than ever, it’s imperative that our elected leaders restore taxes on Connecticut’s wealthiest wage earners to protect the quality of life for all.”
But even labor allies like Senate President Martin Looney, D-New Haven, are quick to point out that increasing taxes on Connecticut’s wealthiest residents is having a diminishing return. He said the portion of the income tax tied to capital gains is the part of the tax that’s lagging.
Lori Pelletier, president of the AFL-CIO, suggested Tuesday that lawmakers should look at the taxes they have decided over the years not to collect.
Those tax credits or tax expenditures on goods and services the state has decided not to tax, for one reason or another, are detailed in a report by the Office of Fiscal Analysis. The report shows the total number of exemptions and credits adds up to $6.4 billion, which is about 35 percent of the $18 billion in general fund revenue the state plans to collect in 2017.
A recent report from Connecticut Voices for Children suggested lawmakers look at eliminating the film production tax credits, which are worth more than $30 million, and the sales tax exemption on winter boat storage, which is about $2.5 million.
Senate Minority Leader Len Fasano, R-North Haven, said he’s had his staff look at the report and there’s not a lot money there to close the budget gap.
“It’s peanuts,” Fasano said Wednesday.
He said there’s a policy reason behind every decision not to tax a good or a service, and businesses will get up and leave the state if these credits disappear.
House Minority Leader Themis Klarides, R-Derby, said getting rid of any of those tax credit programs would be a tax increase and that’s unacceptable.
Democratic Gov. Dannel P. Malloy and lawmakers on both sides of the aisle have refused to consider tax increases as part of the solution.
Sen. Beth Bye, D-West Hartford, said advocates have been talking about looking at revenues, but the sentiment among lawmakers is that “we’ve gotta solve this without new taxes.”
Looney said in 2011 that they solved the budget crisis with a combination of spending cuts, tax increases, and labor concessions. In 2015, they solved it with some spending cuts and tax increases.
“This year we’re reduced to just cuts,” Looney said.
Getting the unions to reopen the 2022 contract for health and pension benefits “is the only thing that can help deliver us from this excruciatingly painful process,” he added.
But the State Employees Bargaining Agent Coalition has refused.
Instead, many of its member unions have taken to the airwaves to protest the layoffs and spending cuts.
“We reject the assessment that Connecticut’s new economic reality has our best days behind us but believe our best days can be ahead of us with bold, progressive leadership,” SEIU spokesperson Jennifer Schneider said. “We can be a state that stops losing jobs and instead creates good, homegrown jobs that help our communities. That starts with rescinding layoff notices to dedicated Connecticut workers and let them get back to the important work of caring for our state.”
Meanwhile, 43 more employees at the Department of Social Services received their pink slips Wednesday.
Chief Justice Chase Rogers told Judicial Branch employees that an initial round of layoff notices will be issued today.
“All layoffs will occur in a manner consistent with the ‘seniority’ definition in each of our four collective bargaining agreements and in accord with our existing practice and procedures,” Rogers wrote. “This means that no employee will be directed to leave his or her workplace upon receiving a layoff notice. The effective date of the Judicial Branch layoffs will be June 24, 2016.”
The 279 executive branch employees who received notices this week have been asked to leave the workplace immediately upon receiving the notice.
The Judicial Branch is also developing plans to close courthouses and offices as it consolidates operations, but was unable to say Wednesday exactly which courthouses would be closed.