Moderate House Democrats join Lamont and Republicans in opposing tax increases

The Moderate House Democratic Caucus said they stand with Gov. Ned Lamont in opposing tax increases on Connecticut’s wealthy residents proposed by their progressive counterparts as Democratic legislative leaders and the governor begin budget negotiations. 

“Moderate House Democrats applaud Governor Lamont’s stance on No Tax Increases for the current biennial budget,” the 26-member coalition said in a press release. “The State of Connecticut should take advantage of higher than expected consensus revenue, a healthy rainy day fund, and its strong financial position to pass a budget that does not include tax increases.” 

Democratic legislative leaders announced they are supporting tax proposals passed out of the Finance, Revenue and Bonding Committee that would add a surcharge on capital gains and a second income tax – called a “consumption tax”—on those making over $500,000 per year. 

Also included in the proposed taxes is a digital ads tax and making the corporate tax surcharge — which was scheduled to sunset — permanent. Altogether, the tax proposals add up to roughly $1 billion, which Democrat leaders say will be reinvested into Connecticut with a focus on cities and equity.

The Moderate House Democrats called the tax proposals “worrisome” and noted that their members voted against the budget package released by the Finance Committee. 

“I oppose any new taxes on the residents of Connecticut,” said Rep. Stephen Meskers, D-Greenwich. “We have more than sufficient funds to address our needs.”

“With fiscally sound budgeting practices, the state has positioned itself with an unprecedented $3.5 billion rainy-day fund,” said Rep. Lucy Dathan, D-Norwalk. “Combining this with strong revenue outlook for FY 21 and the incoming ARP funds, we are able to better serve our residents and operate within our current spending cap. Now is not the time to raise taxes.” 

Democratic leaders including Senate President Pro-Tem Martin Looney, D-New Haven, and Speaker of the House Matthew Ritter, D-Hartford, said they are unconcerned with a potential veto of their proposed tax increases and will negotiate in order to pass a budget by June 9.

Lamont has said multiple times – and reiterated yesterday following Democratic leaders’ press conference – that he is opposed to raising taxes when there is no fiscal need for it.

Both Lamont and the Appropriations Committee have dedicated $1.6 billion of federal COVID-relief funding toward closing the budget gap and using the rest of the federal slush fund to pay down unemployment borrowing and support a number of public health and education initiatives. 

Legislative leaders will also have to negotiate with Lamont on the distribution of those funds. 

There are only three weeks left in the normal legislative session and some big-ticket items remain on the agenda including legalized marijuana and sports gambling, a public healthcare option and the Transportation and Climate Initiative.

The moderate Democrats indicated they will continue to work with legislative leadership and the governor “so that all our collective goals for the people and businesses of Connecticut can be met.”

“Our responsible approach to the state budget is part of why our constituents elected us, and we have the opportunity to keep that promise as we work to find a way to support vital programs without raising taxes,” Rep. Raghib Allie-Brennan, D-Bethel, said.