In a break from the progressive wing of their party, the Moderate Democratic Caucus issued a statement rejecting calls for increasing Connecticut’s tax rates, a statewide property tax and a proposal to break the state’s Constitutional Spending Cap.
“Now is not the time to increase the tax burden on the residents of businesses of Connecticut,” the statement says. “Many families and businesses are struggling because of COVID-19 and it is disheartening that the news coming from some legislators would directly affect their wallets.”
The press statement comes after weeks of highly-publicized proposals from legislative leaders like Sen. Martin Looney, D-New Haven, and thirty other Democratic lawmakers who are recommending statewide property taxes on higher-value homes, increasing tax rates for Connecticut’s top earners and adding a surcharge or a 5 percent tax on capital gains for those with incomes over $500,000.
According to Sen. Looney and Rep. Quentin Phipps, D-Middletown, those tax proposals — largely reflective of those proposed by left-leaning Connecticut Voices for Children — would generate revenue to be funneled into Connecticut’s cities, education spending and a one-time $500 stimulus payment for Connecticut residents who have lost their jobs.
They are also asking the governor to declare a “fiscal emergency” in order to bypass the state’s Constitutional Spending Cap.
Connecticut has a budget surplus this year, but lawmakers and Gov. Ned Lamont are tasked with solving a $2.5 billion budget deficit for the upcoming biennial budget. Connecticut has over $3 billion in its Reserve Fund and expects more federal money to help with its COVID-19 response.
“When we have money in the bank, the last thing we should be leading with is increasing the tax burden on people,” said Rep. Kerry Wood, D-Rocky Hill. “Instead, we have our economy to make a priority so let’s reinvest in Connecticut’s growing biotech and manufacturing sector and expand workforce training.”
“In 2017 Democrats and Republicans came together to implement a Spending Cap, a Bonding Cap and a Volatility Cap,” said Rep. Pat Boyd, D-Pomfret. “The direct result of those structural changes has put Connecticut in a position to have a robust rainy day fund, a budget surplus, and improved bond rating. We must continue to get our fiscal house in order to position Connecticut for future success.”
Republicans have likewise rejected the calls for further tax increases. Senate Republican Leader Kevin Kelly, R-, said it would be a $4 billion proposal and would be “the largest tax increase in Connecticut history,” according to NBC Connecticut.
House Republican Leader Vincent Candelora, R-North Branford, said he sees an opportunity to form a coalition with “Democrats who share our concerns about the state’s economy and disagree with the push to dismantle the fiscal controls Republicans fought to include in the historic bipartisan budget.”
“What’s transpired over the last two days spotlights the growing ideological turbulence within the legislature’s majority party. Progressives have grown bolder and louder, pushing for tax increases and more spending, while so-called moderates are drawing a line in the sand—after enduring several tax hikes, residents, they say, can’t afford to pay more,” Candelora said.
The Progressive Caucus, however holds a strong presence in the House of Representatives claiming 43 members, and the Democrat majority in the Senate is led by Senate President Pro-Tem Martin Looney, who is pushing hard for both his statewide property tax and capital gains surcharge proposals.
Gov. Ned Lamont has thus far not embraced the idea of broad tax increases and is expected to release his budget proposal next Wednesday.
“As a coalition, we are urging the Governor and our legislative colleagues to hold the line on taxes, take advantage of Federal COVID Relief Funding, use caution when spending the rainy-day fund, and continue to pay down our unfunded pension liabilities, which is the perennial burden on our budget process,” the statement says.
The Moderate Democratic Caucus has 25 members, according to their press release.
**This article was updated to include comment from Rep. Candelora**