OPINION: Connecticut's Abuse of Power

The complete breakdown of the legislative process was the most disturbing part of this year's legislative session.  One day after the legislature adopted the budget, residents awoke to corporate giants, such as General Electric and Aetna, threatening to leave the state.  Regardless how one felt about these threats, I believe we all can agree that the negative local, state and national news about Connecticut's budget was unprecedented.  So why did the news hit like a bucket of ice water being dumped on someone's head? The Finance, Revenue and Bonding Committee is responsible for creating and adopting a tax package each budget year.  In keeping with this practice, the committee will hold public hearings to get input on tax policy, whether it be a hearing on a tax cut or increase.  This year the Committee had many bills which addressed the taxing of opiates, marijuana, cars and ball parks.  Taxes, such as, the property tax credit, combined reporting tax, data processing tax, and loss carry forward credits never made the cut for a public hearing.  Dozens of tax concepts that made it into the budget failed to have any input from the public.  The Democrat majority went behind closed doors, crafted tax policy without any input, and then sprung it on the public two days before the vote took place.  Frankly the vote would have been even sooner, but for the fact that they needed to twist many of their colleagues’ arms in order for them to get enough votes to pass it. This unitary or combined reporting tax could be particularly devastating because it requires businesses with headquarters in Connecticut to report and pay taxes on all of their income and losses of their subsidiary companies throughout the world.  So if General Electric owns and pays taxes for a subsidiary in California, they'd need to report and pay taxes on that company in Connecticut as well.  The Democrats believed that this tax would generate approximately $30 million in one year; however the industry believes it will cost over $700 million per year, thus such a massive tax increase cannot be absorbed and Connecticut may see these corporate headquarters relocate to another state to avoid the tax.  Governor Malloy is finally realizing the impact of this tax and last week he asked for a one year delay in its implementation. I fought against this budget.  In particular, I knew the unitary tax would cause irreparable harm to the state.  Why?  Because I sat through the public hearings in 2008, when Democrats had a supermajority and despite their numbers, the Committee never even voted the bill out of the committee process.  We put the concept out there, listened to the public and realized it was just too risky to propose, so we killed the concept immediately. Connecticut's budget represents a sad breakdown of the legislative process and the height of arrogance.  We were elected to represent the public and in doing so, our rules require your input in the process.  To raise a budget that incorporates little input from the public represents a complete abuse of authority and moral abdication of responsibility to the public.  Governor Malloy should veto this budget and we need to start the process over.