Sen. Kelly on state budget: Middle class ‘not a bottomless resource or a blank check’

State Sen. Kevin Kelly
State Sen. Kevin Kelly

State Sen. Kevin Kelly, who represents all of Shelton, voted against the state budget passed by the Democratic-led Senate and expected to be signed into law by Gov. Dannel P. Malloy.

“The middle class family taxpayer is not a bottomless resource or a blank check,” Kelly said. “Our families are struggling, trying to pay our bills, meet our mortgages, get to work on time, and raise our children as good citizens.

“But it is getting more and more difficult, and more and more taxes don’t make it any easier for that family,” he said. “They are crying uncle, 'Enough with the taxes!’ and they are outraged.”

‘A broken promise’

Kelly, now in his third term, said the new state budget will increase spending at more than 7%, 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.

Reduce property tax credit

Kelly said the state budget would:

— Reduce the property tax credit from $300 to $200, impacting many individuals who own a home or a car. Represents a $152 million “money grab.” Of those utilizing the tax credit, 81% have annual incomes of less than $100,000, 66% have incomes of less than $75,000, and 44% have incomes of less than $50,000.

— Repeal the scheduled sales tax exemption for clothing/footwear under $50, and reduce the sales tax holiday from applying only to items under $100 instead of $300. Represents a $280 million tax hike.

Sales tax on the Internet

— Implement a 3% sales tax on the world wide web (including digital downloads and ebooks), a new $55 million tax.
— Implement a sales tax on car washes, a new tax totaling $13.6 million.

— Increase a luxury sales tax rate on engagement rings and wedding dresses to 7.75%, totaling more than $4 million.

— Delay the scheduled increase in the personal exemption for single filers. According to the Department of Revenue Services Personal Income Tax Study of January 2014, 90% of single filers had $75,000 or less of state income. Totals a tax increase of $10.8 million in fiscal year 2016.

— Reduce the burial benefit provided to indigent people by $400, giving their loved ones $1,400 to pay for a funeral.

Veterans’ funerals cutback

— Take away funding for the veterans honor guard, which means no gun salute at a military service members funeral

— Implement a sales tax on motor vehicle parking, a new tax totaling $12.2 million.

— Tax ambulatory surgical centers, representing a $35 million new tax.

— Increase the hospital tax by $410 million. Added costs will be passed onto patients.

— Delay increase in earned income tax credit, a tax hike of $22 million on working class families.

— Triple the computer data and processing sales tax rate, a tax hike of over $140 million.

— A $500 million tax hike on businesses, which will make it difficult for employers to grow jobs and remain competitive

Impact on CT businesses

In a press release, Kelly provided quotes from large Connecticut employers on how tax increases — especially those impacting businesses — might affect them. Several firms indicated they may consider relocating or moving certain operations elsewhere.

“I, along with my fellow Republican legislators, applaud these large employers and most importantly the people for speaking out,” Kelly said.

Below are the company quotes:

General Electric, which employs 6,300 in CT:

“Retroactively raising taxes again on Connecticut’s residents, businesses and services makes businesses, including our own, and citizens seriously consider whether it makes any sense to continue to be located in this state.”

Aetna, which employs 7,450 in CT:

“Connecticut is in danger of damaging its economic future by failing to address its budget obligation in a responsible way. Such action will result in Aetna looking to reconsider the viability of continuing major operations in the state.”

Travelers, which employs 6,200 people in CT:

“Raising taxes again will increase the cost of living for nearly every resident and small business in the state, negatively impacting our employees and customers.”

Boehringer Ingelheim Pharmaceuticals, which employs more than 47,000 worldwide:

“Implementing the current, short-sighted tax proposals will stifle innovation, especially research and development of critical medicines, and have far-reaching implications on our ability to plan and make long-term business decisions. The current proposal will undermine the financial feasibility of continued capital investments at our Ridgefield/Danbury site.”