June 4, 2019

Rep. Kennedy Slams State Budget & $2 Billion Tax Hikes on Middle Class

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HARTFORD – State Rep. Kathy Kennedy (R-119) along with her House Republican colleagues Monday after hours of debate unanimously rejected the budget plan that raises hundreds of millions in sales taxes, raids the transportation fund to pay for ongoing services and hikes income taxes on thousands of small business owners.

Parking garages, the Internet, dry cleaners, restaurants, plastic bags and scores of other goods and services will all cost Connecticut consumers more beginning July 1 due to sales 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 because of the scheme hatched by the majority in order to close an estimated $3 billion deficit over the next two years that is of their making.

Overall, taxes were raised by $752 million over two years, not including the tax on hospitals.

Instead, Republicans offered a series of amendments to reduce government spending, shrink the bloated bureaucracy, privatize certain state agencies, preserve funding for the Special Transportation Fund and keep intact pension exemptions for seniors, as well as send more money for towns and cities. Municipalities would get an additional 5 percent in funding in the second year of the budget.

“This budget document is heartbreaking to me. Many of my constituents are struggling to make ends meet. I hear daily stories that families are forced to choose between paying one monthly bill over another and now the General Assembly and Gov. Lamont will make living in Connecticut even more expensive with the new taxes the working class,” said Rep. Kennedy.

Kennedy supported amendments relied on spending cuts to the taxpayer funded Citizen Election Program lawmakers rely on to fund their campaigns, furlough days for non-union state employees, privatization of certain agencies that provide social services, reductions in benefits for state retirees.

The Republican amendments included the following:

• Preserve the property tax credits businesses receive operating as LLCs.
• Block the re-financing of the teachers’ pension fund 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 in new car sales revenue from the STF to the general fund.

Republicans also proposed increasing aid to towns and cities and an omnibus pro-business plan that would be paid for through spending cuts and savings in government programs.

The pro-business amendment had several provisions:
• Repeal the business entity tax;
• Phase out the capital stock tax;
• The alternative family leave plan that would be optional and not a mandatory payroll tax.