Join State Representative Cafero as he discusses Connecticut’s state budget and the issues that defined 2013′s legislative session.
HARTFORD – Democrats may be scheming to circumvent the Constitutional spending cap by exempting hundreds of millions in Medicaid funds, a gimmick that would make a mockery of the budget process, House Republican Leader Larry Cafero said today.
Based on published reports and discussions around the Capitol, Cafero said it appears the Democrats are intent on circumventing the cap without going on record to do so. “The Democrats apparently will try to get around voting to blow up the spending cap by simply taking about $500 million off budget. It is an amazing abuse of the budget process,’’ Cafero said. “The Democratic budget was already filled with gimmicks but since they can’t find enough votes to skirt the cap, they are taking gimmickry to an absurd level.’’
Cafero said if the Democrats go ahead with their plan, it will violate the State Constitution.
Cafero referred to a recent Associated Press story in which Democrats said they will have to adopt “policy changes’’ to ensure that a portion of Medicaid spending is not counted against the Constitutional spending cap.
“We need to live within the limits of this Constitutional cap that 80 percent of voters approved. The Democrats want to render the cap meaningless and re-define the will of the people. The key to this sham of a budget the Democrats are negotiating with the governor is the spending cap,’’ Cafero said.
The Constitutional cap would allow spending to top out at $19.4 billion in the next fiscal year with revenues projected to be $19.39 billion. “It is pretty simple: Don’t spend more than you take in,’’ Cafero said.
Cafero said adhering to the cap would be the right step toward putting together a bipartisan budget. “If the Democrats agree to this condition we would have the basis for negotiations. Otherwise, they will be putting together a budget loaded with gimmicks and two more years of fiscal instability,’’ he said.
Democrats need 60 percent of the votes in both chambers to bust open the spending cap and have the numbers in the House and Senate. However, some Democrats have balked, holding their votes as leverage for other items they want in the budget, Cafero said.
“The Democratic budget proposals do not balance, are built on every conceivable gimmick and borrow money for operating expenses,’’ he said
HARTFORD – Companies that go out of business should not have to pay a “death tax” to the state for the privilege, House Republican Leader Larry Cafero said today in support of Secretary of State Denise Merrill’s initiative that is being held by the Finance Committee.
Cafero said that dissolving companies owe an estimated $400,000 annually to the state and that owners are already usually experiencing financial hardships.
“This penalty amounts to a ‘death tax’ for businesses that are disappearing. We force them to pay a $250 fee to open their doors and then Connecticut clouts them again on the way out when they close their doors,’’ Cafero said. The cost of dissolving ranges based on the size of the company, but starts at $20 and can be as much as $120.
Cafero said the proposal was held today by the finance Committee. Democrats may be unwilling to eliminate the tax because the state would lose that $400,000 in revenue at a time when government is awash in red ink, Cafero said. He said the money could be found within the $20 billion state budget to account for the loss of revenue.
Merrill said the bill would also help her office track companies that are no longer in business because many dissolving entities never notify the state of their status because of the “death tax.’’
Cafero said there is still time to move the bill forward from the committee and urged the panel to do so.
HARTFORD – Newly found health care savings for state workers and retirees totaling $223 million should be used to block the scheduled July 1 16-percent increase in gas taxes, House Republican Leader Larry Cafero said today.
If no action is taken, the wholesale gas tax will go up by four cents per gallon costing motorists $60 million over the next year.
“There is no excuse not to eliminate the gas tax hike. We have the resources based on the just released anticipated savings in our health care system for state workers and retirees. Now we just need the leadership and political will to give Connecticut drivers and businesses the break they deserve,” Cafero said.
Budget experts from the Office of Fiscal Analysis, in recalculating anticipated health care costs for the next two-year budget, now predict Connecticut will need $93 million less in fiscal year 2013-14 and $130 million less the following year. Both Gov. Malloy and the Democrats had originally built in higher costs in their budgets but Cafero said the money should be used for immediate relief.
He proposed applying $60 million of the savings to the gas tax thereby eliminating the scheduled increase.
“Rather than pump the savings from the healthcare accounts into programs that only make government bigger, we ought to be helping taxpayers, motorists and businesses that are going to be further squeezed at the pump starting July 1,’’ Cafero said.
Last year Republicans succeeded in forcing the Democrats to accept their proposal to block the scheduled hike that would have kicked in July 1, 2012. Republicans proposed capping the tax permanently, but Democrats only supported a one-year cap.
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HARTFORD – House Republican Leader Larry Cafero today criticized Gov. Malloy for sweetening the corporate welfare deal to entice the world’s largest hedge fund to re-locate from Westport to Stamford when the Bond Commission authorized an additional $9 million in funding for the move.
The state was already prepared to spend $115 to facilitate the relocation of the Bridgewater hedge fund.
“Giving more than $100 million to a billionaire so that his company can enjoy enhanced Long Island Sound views is not economic development. It’s corporate welfare that sucks up precious dollars that should be spent elsewhere,’’ Cafero said. “We ought to be targeting small business development.
Republican bond commission member voted against the authorization that the panel approved. The $9 million in additional funds is for infrastructure projects associated with the development of the site.
The Bridgewater deal has been criticized in many corners including the greater Stamford area. Cafero said the state should be focusing on bringing out of state companies into Connecticut for economic development. In any event, he said, Bridgewater has enough resources to finance the move itself.
“I believe this is the wrong policy for Connecticut because I it chooses winners and losers among our own towns,’’ Cafero said.
HARTFORD – Raising the minimum wage will costs jobs as early as this summer, House Republican Leader Larry Cafero said following the announcement by Gov. Malloy that he would support hiking the minimum to $9 over the next two years.
“Raising the minimum wage at this time will hurt small businesses that already have razor thin profit margins. They cannot withstand another costly burden coming out of Hartford in this economy,’’ Cafero said. “This would be just another signal to businesses that Connecticut does not have the private sector in mind when it passes legislation.’’
Cafero said the small businesses he has talked to, particularly those that are seasonal, are likely to cut back on hiring in the coming months if the legislature raises the minimum. Businesses have to set a budget for the year and cannot simply absorb higher costs without making adjustments and cutting costs elsewhere.
Cafero noted the state’s economy has not recovered enough in the wake of the recession and that unemployment is 8 percent, still higher than the national average. The timing of raising the minimum wage is critical.
“We cannot as a state continue to ask businesses, particularly small businesses, to dig deeper into their own pockets while at the same time require taxpayers to foot the bill to make government bigger,’’ Cafero said. He noted that in recent years Connecticut became the first state in the country to mandate that companies provide paid sick days for its employees and enacted an Earned Income Tax credit for low wage workers.
HARTFORD - House Republican Leader Larry Cafero today challenged lawmakers to block the July 1 automatic 16-percent gas tax hike, saying funds are available to avert the increase that amounts to $60 million over the next year.
Last year Republicans prevailed in stopping the scheduled gross receipts gas tax increase but Democrats refused to make permanent a ban on future hikes. On July 1 the wholesale tax is scheduled to go from 7 percent per gallon to 8.1 percent.
“We have the available resources in a number of areas of the state budget to prevent this gas tax hike. What we need now is the will to give taxpayers and drivers a break. The taxes on gasoline and diesel are too high as it is,’’ Cafero said. “The more we tax, the more economic development is hindered and commerce suffers because businesses have to pay these taxes too.’’
The gross receipts tax is the most onerous of taxes. As the price of gasoline increases, the tax also goes up because it is leveraged as a percentage on each gallon of gas sold. Since 2005, motorists have paid $450 million more in gross receipts tax increases.
Cafero outline a number of areas where the $60 million in anticipated revenue to the state could be made up in the $21 billion budget:
Cafero noted that the gross receipts gas tax has been hiked periodically for years and that it is not clear to motorists that it increases as the price of gasoline increases.
“This gas tax is a windfall for the State of Connecticut and unless we take action, that tax is going to increase over time. People are reminded every time they fill up that they pay too much in taxes at the pump,’’ Cafero said.
The tax was originally 1 percent on the wholesale price put on to provide tank owners with insurance in accordance with federal law. “Obviously we have seen it grow whenever state government needs more taxpayer dollars to fund programs,’’ Cafero said.
NORWALK – On Monday, House Minority Leader Larry Cafero and other local officials celebrated the completed renovation of the historic Grumman St. John House.
The Norwalk Inn & Conference Center initially wanted to raise the building to expand its flourishing business, while the Norwalk Preservation Trust’s focus was to preserve the historic landmark. The Grumman St. John House has stood for nearly three hundred years, and even survived the burning of Norwalk by the British during the American Revolution.
“We knew years ago that we had a battle ahead,” Cafero said. “Both sides were entrenched in their respective camps, both sides had valid claims and both sides were willing to fight. But we were able to sit down, roll up our sleeves, and hammer out a solution that worked for everyone and ultimately benefit the people of Norwalk.”
The final deal involved a $1.5 million restoration of the Grumman St. John House into an 11-room hotel with a beautifully modernized interior that incorporated historic elements such as fireplaces and staircases. That renovation was celebrated on Monday afternoon.
“We have allowed a strong small business to expand and we’ve preserved one of the most iconic buildings in Norwalk,” Cafero said. “This is without a doubt one of the proudest moments — seeing this project come to fruition. This is an accomplishment Norwalk can truly be proud of.”
HARTFORD – Democratic lawmakers want to shift huge portions of government operating expenses to the state’s credit card, by borrowing nearly $1 billion more for town roads, stem cell research, fund non-profits, but delay paying off previous debt, House Republican Leader Larry Cafero said today.
“Putting more and more of our day-to-day costs on the state’s credit card is a sure fire recipe for disaster,’’ Cafero said. “ The Democrats on the Finance Committee have decided that, rather than figure out how much government we can actually afford, they simply decided to borrow for items that we never contemplated.’’
The Finance Committee on Tuesday adopted the plan to rack up more debt to pay operating costs. Despite the largest tax hikes in state history in 2011, revenues continue to lag. The projected deficit for the coming two years is nearing $3 billion.
Until two years ago local road aid was always paid for out of the operating budget but under this plan Connecticut will borrow $120 million to maintain local roads and streets.
“This amounts to nearly $1 billion in additional borrowing that should fall within the normal course of the budget. It is bad fiscal policy that cannot be sustained,’’ he said.
HARTFORD – Saying it was another example of arrogant one-party rule, House Republican Leader Larry Cafero blasted Democrats over their plans to improve their party’s ballot position in 2014 by taking the GOP top line away.
The Supreme Court last September unanimously ruled that the Republicans should occupy the top spot based on the 2010 election results because their gubernatorial candidate Tom Foley actually got more votes on the GOP line than Dan Malloy did on the Democrats’. Malloy prevailed because he also ran on the Working Families line.
“First, the Democrats ignored the law. Then when they got caught, they fought the law. Now, having lost 7-0 in the State Supreme Court, they want to change the law,” Cafero said. “They dismissed our arguments as frivolous and now they want to alter the system we have lived with for years because they can. It is total arrogance.”
Current state law says that the top ballot spot goes to the party that received the most votes in the previous gubernatorial election. Cafero said the law is quite clear and did not take too much to convince the high court. The bill before the legislature changes the statute to say that the party the governor is enrolled in will take the top ballot position in the next gubernatorial election.
The Government Administration and Elections Committee voted out the legislation to the floor of the House today.
“This is yet another example of the downside of one-party rule in Connecticut. When the rules are not to your liking, regardless of legal precedent or procedure, the Democrats can simply change them,” Cafero said.