HARTFORD – Finance Committee Ranking Member, State Representative Christopher Davis (R-57), after hours of debate opposed the Democrat budget that increases state spending on new and expanded programs despite massive projected deficits, raises hundreds of millions in sales taxes, raids the transportation fund to pay for new General Fund expenses, and hikes income taxes on thousands of small business owners.
Rep. Davis commented, “I approached this budget as a concerned taxpayer, a small businessman and as a father. Citizens are right to be concerned about the direction of our state. This budget squeezes the middle class from every direction. Families will have to pay more for every day goods and services from the grocery store to online services such as Netflix.”
Parking garages, digital goods like apps and downloads, dry cleaners, meals at restaurants, plastic bags at all stores, and a number of other goods and services will all cost Connecticut consumers more due to the tax hikes. Thousands of business owners operating as LLCs will pay an estimated $50 million more in income taxes under the Pass-Through Entity tax system change in the new budget as well.
“We are going down the wrong path. This budget increases spending, increases borrowing, and increases taxes,” shared Rep. Davis. “There are very few things that I can see in this budget that could have a positive impact on our state’s economy. In fact this budget agreement will make it even harder for our economy to grow. Connecticut is lagging behind the rest of the country and our region when it comes to wage and job growth. Repeating the mistakes of the past will not help us move forward.”
The budget passed without a single Republican vote in either chamber. Overall, taxes were raised over $1.7 billion in the two year budget.
“We offered a number of specific solutions to make this budget better,” said Rep. Davis. “Unfortunately, the majority party Democrats were uninterested in reducing spending.”
Instead, Republicans offered a series of amendments to reduce government spending, shrink the bloated bureaucracy, privatize certain state services, preserve funding for the Special Transportation Fund, and keep intact property tax credits for most East Windsor and Ellington residents, as well as an amendment to prioritize spending to send more aid to East Windsor and Ellington.
The Republican amendments included the following:
- Preserve the scheduled return of the property tax credit to most East Windsor and Ellington residents that was again restricted in the budget proposal.
- Preserve the current pass-through entity tax for businesses operating as LLCs, LLPS, and the alike. The Democrats, just a year removed from implementing the pass through entity tax credit, reduced that credit, costing taxpayers $50 million in income tax increases;
- Avoid the re-financing of the teachers’ pension fund as proposed in the budget that will cost the next generation of taxpayers $27 billion more because the payments will be stretched out for an additional 14 years;
- Block the diversion of $171 million over the next two years from the Special Transportation Fund to the General Fund that was included in the budget.
Republicans also proposed increasing aid to towns and cities and an omnibus pro-economic growth plan that would be paid for through spending cuts and savings in government programs.
The pro-economic growth amendment had several provisions, including:
- Repeal the business entity tax for all businesses;
- Phase out the capital stock tax for much needed start-ups and entrepreneurs;
- Eliminate the proposed fee increases on businesses;
- An alternative family leave plan that would be optional for the employee and not a mandatory payroll tax.