By 1 a.m. on June 30, most of the dark-suited lobbyists had left the Capitol building, as had the cheering union sympathizers wearing purple t-shirts inscribed with the words “Fight for $15.”
In the House, lawmakers were just wrapping up the special session by voting 78-65 on the budget “implementer” – a huge, 686-page bill given to them just hours before it was called for a vote. Two Democrats – Rep. David Alexander of Enfield, and Rep. John Hampton of Simsbury – joined all present Republicans in voting no on the implementer.
This vote was the final action on the 2016-17 state budget; and also brought to an end the 2015 legislative session, which included a one-day special season.
The final result of the session is clear – Connecticut’s economy is in much worse shape now than it was when lawmakers returned to Hartford in January.
$1.8 Billion in Tax Hikes
The 2016-17 budget increased taxes and fees by a massive $1.8 billion, including $500 million in canceled or delayed tax breaks.
Several business leaders took the extraordinary step of speaking out publicly against the massive tax hikes for businesses in the budget. Employers are on the hook for $481 million of the tax hikes.
Also hard hit were the state’s hospitals, which saw a $455 million tax increase over the two-year budget.
Here is the breakdown of the tax increases:
- $442 million increase in the income tax, including a $163 million hike on middle income earners, and another $289 million on small businesses and individuals earning over $250,00 and couples earning over $500,000;
- $349 million increase in the sales tax;
- $481 million increase for corporations;
- $455 million increase for hospitals, including a 6 percent tax on ambulatory surgical centers;
- Another $73 million in revenue increases and canceled tax breaks.
The hardest hit in all of this were you and me – not just because we’ll all pay higher taxes, no matter where we fall on the income scale, but also because this budget hurts the state we live in and love.
This Budget Belongs to the Public Sector Unions
On the other side the equation, the public sector unions were happy with how the budget and the legislative session turned out. Week after week they flooded the halls and committee rooms at the statehouse in Hartford with their supporters, who demanded more spending and higher taxes.
What the unions didn’t like was that this year there was pushback against their usually unchecked power.
Rep. Joe Aresimowicz, a full-time public sector union employee and the current majority leader in the House, accused those who’ve raised the alarm about this budget of spreading “doom and gloom,” and said that this has a “chilling effect” on the state’s economy.
Note to Mr. Aresimowicz: What really has a chilling effect on the state’s economy is the budget you just voted for.
Aresimowicz, and the other lawmakers employed by public sector unions, saw to it that the focus stayed on tax hikes instead of on the huge cost increases in public sector pay and benefits.
They also snuck several of their legislative priorities into the budget “implementer.”
Earlier in the session lawmakers rejected a bill establishing paid family leave, and another that taxed low wage jobs.
But the union supporters of these bills were not deterred – they slipped language into the budget implementer that puts in place a Connecticut Low Wage Employer Advisory Board, and also directs the state’s Department of Labor to put in place policies that will pave the way for paid family leave.
The unions snuck in Section 112, which says that any payments that are past due to employee benefit funds are defined as wages under the law. This provision only affects public employees, since there is a federal law in place that trumps this law for private employers. Under Section 112, if the state or a municipal government fails to make its annual required contributions into their pension funds, employees can sue for up to twice the amount owed.
Other ‘lowlights’ of the implementer include:
- Pay raises for the state’s judges;
- Giving Gov. Malloy’s budget chief the power to decide which municipalities should get money from the new Municipal Revenue Sharing Account;
- Adding 11 new state employees to the state’s Commission on Human Rights and Opportunity to oversee a new mandate on construction projects funded by municipalities;
- A new mandate on local school boards related to English Language Learners;
- Absolutely essential (note the sarcasm) measures that address honking at horses, license plates commemorating men’s health, and addressing where golf carts can drive.
Local Tax Reform
The implementer further tinkered with what the Democratic leadership has touted as the cornerstone of their budget – so-called “property tax reform.”
I say “so-called” because while some residents will see their car tax bill decrease, many others will see no change.
State lawmakers are also promising to send some money collected through the sales tax to certain cities and towns, but most cities and towns will not be part of the handout.
What lawmakers should have done is dedicate sales tax revenue to cities and towns through a simple equation, but instead they first established a convoluted equation, then scratched that equation and instead handed all power over to the governor’s budget secretary.
Concentrating more power in the hands of the executive branch in Hartford is a bad idea.
Even if towns do see revenue, there is little chance property taxes will come down because of these changes. More likely, unions will gobble up the new revenue for local employee pay and benefits.
And local officials are doubtful the money will even materialize, given the state’s own projections that there are hundreds of millions of deficits in the 2018 and 2019 budgets.
But Don’t Give Up – There’s a Ray of Hope
Before I leave everyone depressed, let me tell you that I think there’s a ray of hope on the horizon.
This session, many of you – more than ever before – spoke up in outrage against the direction Connecticut is headed in.
Many of those in power didn’t like that – witness Sen. Ted Kennedy’s rant against the Yankee Institute for encouraging his constituents to call him and tell him not to vote for the budget.
Other senators and representatives who like the status quo complained that you were flooding their phone lines with complaints about the budget.
We say: Good for you! And keep it up.
The only way we’re going to get change in Hartford is if people like you and me speak up and tell lawmakers that enough is enough. We need them to understand that they need to cut spending, not increase taxes.
They may not have listened this time around, but if we expect them to listen in the future we have to keep it up – keep up the calls, the emails, and the demand that lawmakers start listening to their constituents.
Let them know you’re worried about the direction Connecticut is headed in. Let them know Connecticut can have a bright future, but only if things change.