The new state budget is getting a thumbs down from Shelton’s legislative delegation and Mayor Mark Lauretti, all of whom are Republicans.
“The middle-class family taxpayer is not a bottomless resource or a blank check,” said state Sen. Kevin Kelly, criticizing the new taxes in the spending plan approved by the Democratic-led state legislature and signed by Democratic Gov. Dannel P. Malloy.
“There is a limit to what taxpayers and businesses can endure to support the profligate spending this legislature is addicted to,” said state Rep. Jason Perillo.
State Rep. Ben McGorty said the budget “doesn’t protect the middle class — it’s an assault on them.”
The Democrats approved a budget by razor-thin margins in both the House and Senate, at the end of the legislature’s regular session in early June.
Backlash from business
The new budget includes various new taxes to deal with large projected deficits. Many of the higher levies impact businesses, which caused a backlash from some of the state’s largest companies.
General Electric, Aetna and Travelers warned that tax increases could cause them to move their headquarters, or certain operations, out of state.
Democrats countered that more revenue was needed to avoid drastic social service cuts — some of which were proposed in Malloy’s original budget plan — and that many of the large multinational corporations complaining the most actually pay little in state taxes now.
‘They’re nuts’ in Hartford
Lauretti, who unsuccessfully ran for governor last year, said the Democrats in Hartford are addicted to spending — a phrase also used by Shelton’s legislators at times.
“They’re nuts. I don’t know what else to say,” Lauretti said of legislative Democrats and Malloy.
Lauretti said higher taxes will have consequences. “When you keep taxing people — even the wealthy — they’ll shift gears on how they operate,” he said. “They’ll move their assets out although they may not move their residences out.”
Despite the criticism and the state’s acknowledged budget woes, Lauretti said Shelton actually expects to get an increase in state aid due to the new budget. This is partly due to how a portion of state hotel taxes are given to host communities.
“It’s hard to understand, but we became the beneficiaries,” he said.
Lauretti said public complaints from corporations such as GE and Aetna are unprecedented. “We’ve never heard from companies like this before,” he said, also drawing a connection between Sikorsky Aircraft’s recent decision to close its Bridgeport factory and higher state taxes.
Kelly, now in his third term, said many families are struggling to pay their bills. “More and more taxes don’t make it any easier for that family,” he said.
He said the new state budget will increase spending at more than 7% over two years, while “the largest tax increase in state history continues to tax people and business to the tune of $2 billion. This budget is a broken promise that Connecticut families are going to be saddled with.”
Kelly was referring to Malloy’s promise during his 2014 re-election campaign not to raise taxes.
Kelly noted the new budget will reduce the property tax credit from $300 to $200, impacting many individuals who own a home or a car. He said it also will repeal the scheduled sales tax exemption for clothing/footwear under $50, and add a 3% sales tax on the Internet (including digital downloads and eBooks).
No ‘shared sacrifice’
Perillo said Malloy had asked for “shared sacrifice” during his first term but then approved a $1.8-billion tax increase.
“Instead of properly managing our state’s finances and making tough choices, he has come to the well again, essentially telling residents that they still don’t pay enough for government,” said Perillo, who has been in office since 2007.
McGorty, first elected last year, said Democrats don’t want to control spending. “Democrats chose once again to pass the burden of bloated government to the working families of the state,” he said.
The two state representatives said of the $1.5 billion in new taxes in the budget, $475 million comes from wiping out previously scheduled tax cuts for shoppers, businesses, insurance companies and the working poor.