Klarides Votes Against Historic Tax Increases
Record Tax Increases in State Budget Proposal
State Representative Themis Klarides today voted against a controversial two-year state budget proposal by Governor Malloy and majority Democrats. The proposal builds on questionable revenue schemes, increases government spending, hikes taxes and doubles taxes for Connecticut job provides that threaten Connecticut’s fragile economic recovery. The proposal also contains a $2 billion hole of assumed union concessions, yet to be agreed upon by state employee unions.
Majority Democrats pushed their $40 billion budget pact with Gov. Dannel Malloy through the House in a 83 to 67 vote with 15 Democrats joining Republicans in voting against the proposal. The Democratic package narrowly passed the state Senate in 19 to 17 vote early Tuesday morning. The controversial budget now awaits signature from Malloy—the architect of the largest tax increase— about $2.09 billion in the first year alone—in state history.
Klarides expressed her deep concern today about the levels of taxation and increased spending in Governor Dannel Malloy’s proposed budget. “The tax hikes begin retroactively to include a hit all Connecticut wage earners and homeowners. Everything from non-prescription drugs to concert tickets will see taxes and the proposal also strips the tax-free exemption for clothing and shoes under $50 all the while, this budget fails to curb state spending,” said Klarides. The budget proposal also slashes the $500 property tax exemption by 40 percent for Connecticut homeowners.
“The quality of everyday life is what’s at stake here. The federal government is asking for more, energy prices are climbing, the price of gas is breaking records, food costs are up and this tax package will only hurt more. Sadly, it’s our most vulnerable who are on fixed incomes such as Social Security or unemployment who will be hurt the most,” said Klarides.
Klarides took issue with specific lifestyle and hobby taxes such as a yarn tax and a yoga tax. She introduced a tax relief amendment on the floor as part of a tax relief package of amendments offered by House Republicans. “We encourage people to adopt preventative health care lifestyles, but then turn around and reward them by taxing yoga, vitamins, over the counter medications and health fitness. It just doesn’t make sense,” said Klarides.
Klarides was particularly concerned about the controversial tax increase on job providers. “With an unemployment that is higher than the national average at just over 9 percent, this is not the time to tax job providers. Connecticut’s largest employers are making headlines losing or moving jobs out of state. Pfizer announced it’s moving over 1,000 Connecticut jobs to Massachusetts, a software company AmkaiSolutions moving jobs to New York— something Governor Cuomo made sure we heard— and manufactures all across the state are posting job losses in the hundreds. In this climate, at this time, why would Governor Malloy and state Democrats want to double corporate tax rate from 10 percent to 20 percent? Let’s encourage job providers to call Connecticut home,” said Klarides.
The state budget proposal relied on revenue estimates to balance the budget that the state’s top tax collector warned won’t work. It also assumes $2 billion in state employee union concessions in order to balance the budget, but no agreement has been reached with the unions. “When you look at the numbers, it appears this budget is already out of balance. We just might find ourselves having to solve a state budget deficit before the two year budget is over,” said Klarides.
Prior to the vote, Republican’s offered an alternative “no tax increase” budget on the floor. This proposal came as a result of town hall meetings. Republicans heard overwhelmingly from across the state Governor Malloy’s proposal was controversial and too heavy handed on taxpayers. They responded to calls for cuts in spending, reducing the burden of state government, and encouraging job growth for businesses in their plan. Their proposal closed the deficit with zero tax increases, preserved the social safety net for those in need and spent $900 million less than the plan proposed by House Democrats. Municipal and education aid remained received full funding, Savings were accomplished by rolling back the size and spending of state government to prior budget years.
Among the steps Republicans used for savings in their “no tax increase” budget:
• Enhanced Medicaid fraud detection units will save roughly $224 million in wrongful payments.
• Republicans plan to save more than $46 million through agency consolidations.
• State government will be streamlined through attrition and reduction in the 54,000- state payroll.
• No money will be borrowed for day-to-day state operations.
• More than $200 million in the state’s highest cost debt will be pre-paid, thus allowing for greater flexibility in budgeting throughout state agencies.
“Today there was a clear difference. We could continue the tax and spend policies of the past with a blind eye to the future. We could choose the never ending expansion of the unsustainable size and scope of government. Or we can listen to the people of Connecticut and offer real solutions to governing the state with an eye towards job growth, reducing our debt and making every day living more affordable. With some hard work we found efficiencies and we balanced the budget without any raising taxes. However, this Governor and the majority—much like they did to taxpayers across the state—turned a deaf ear and continued forward with their agenda,” said Klarides.