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Malloy Says He Won’t Veto The Budget

by | Jun 4, 2015 2:57pm
() Comments | Commenting has expired
Posted to: Business, The Economy, Election 2010, Election 2014, State Budget, Special Session, Taxes

Christine Stuart photo

Gov. Dannel P. Malloy and Lt. Gov. Nancy Wyman

Gov. Dannel P. Malloy won’t veto the two-year, $40.3 billion budget that increases taxes by nearly $2 billion, even though on the campaign trail last fall he promised no new taxes.

Malloy reasoned outside his Capitol office Thursday morning that he upheld that promise because the budget he presented on Feb. 18 did not increase taxes, even though it extended taxes scheduled to sunset and eliminated tax credits proposed in previous budgets.

Asked if he would veto the budget the General Assembly sent him last night, Malloy said “there’s work to be done, but I don’t envision that happening.”

However, Malloy did not explicitly say he would sign the budget, which he will have 15 days to consider once it reaches his desk.

Even before he announced his re-election bid last year, Malloy promised the business community he didn’t intend to raise taxes.

“If we did have a deficit we’re not going to raise taxes. We’re done. I gave,” Malloy said on March 5, 2014, at a forum hosted by the Connecticut Business and Industry Association.

He said in 2011 when he took office he faced a $3.6 billion budget deficit and there was no other way to fix that problem without taking a look at everything from tax increases to changes in the state’s relationship with its workforce.

“I think we’re entering into a phase where over the next few years revenues will rise — not because we’re adding new taxes — but because the economy is slowly but surely getting better,” Malloy said in 2011.

However, the economy didn’t improve as quickly as Malloy anticipated. And after winning re-election in 2014, Malloy said he didn’t “see any new taxes.”

But on Wednesday, the final day of the legislative session, Democrats pushed through a budget with $2 billion in tax increases. On Thursday, during a post-legislative session news conference, the governor and Democratic lawmakers tried to highlight the positive legislation included in the budget, regardless of the tax hikes.

The said they never envisioned a budget that makes so much progress on property tax reform and transportation initiatives. The proposal approved 19-17 by the Senate and 73-70 by the House caps municipal motor vehicle taxes, changes how cities and towns are funded, and uses a half a percent of the 6.35 percent sales tax to fund transportation projects.

“If you ask both the business community and individuals what’s the most onerous tax in their opinion, they’ll tell you property taxes. If you ask business leaders what’s the biggest challenge in Connecticut, they’ll tell you transportation. This budget allows us to make progress on both,” Malloy said.

Malloy said he continues to have discussions with business officials at GE, which was one of the first companies to publicly release a statement in opposition to the budget. He said their concerns are something lawmakers should “take a look at,” not just in special session but going forward.

“I think the revenue package is the revenue package. I think it needs to be fully understood, and to the extent it needs to be clarified, it should be,” Malloy said.

House Republican Leader Themis Klarides, R-Derby, said the package approved Wednesday sends a message to the business community that they are not welcome in Connecticut. About $282 million of the more than $670 million in tax hikes in the first year of the budget will be paid by the business community through a variety of tax increases.

Elizabeth Regan photo

House Minority Leader Themis Klarides and Reps. Laura Hoydick and Gail Lavielle

Klarides said the governor has apparently “convinced himself that this isn’t his budget,” even though his employees were in the room negotiating a deal with the legislature’s Democratic leadership.

“I always believed that if the governor had to take a lie detector test he would pass it because he convinces himself of what he says, no matter how ridiculous it is,” Klarides said. “I would urge him if he doesn’t believe this was his budget then he should veto it and we should start over. Otherwise it’s hypocritical.”

Klarides said the budget the Democrats approved doesn’t fix the problem because the budget projects a $1.2 billion deficit in 2018 and 2019.

The budget spends $19.8 billion in the first year and $20.4 billion in the second year. That’s a 4.1 percent increase in spending in the first year and a 3.25 percent increase in spending in the second year.

But if it was such a great budget then why did so many Democrats have to be convinced before voting for it?

House Speaker Brendan Sharkey, D-Hamden, said that by offering property tax relief and funding transportation they “were doing something everyone in the state wants us to do.”

He said those things had to be addressed this year and some of his members needed to understand that before they voted on the budget. After an all-night session Tuesday, Sharkey called the budget bill at 5:20 a.m.

Sharkey said he talked to members throughout the night about the impact of the budget, and said none of his members received any special funding for their communities in exchange for their vote.

Sharkey said statements from GE, Aetna, and Travelers who said they were thinking about leaving the state over the tax package was just “static.”

However, the Associated Press has reported that GE told its employees Thursday that they were looking for possible relocation options.

Aetna also released a statement today:

“Elected leaders have failed to address the state’s budget obligation responsibly. But it’s Connecticut’s businesses and residents that will pay the price. Aetna currently pays approximately $65 million each year in taxes to the state. Once this new budget is fully implemented, our tax burden increases by approximately 27 percent annually. Taxes like the tripling of the computer and data processing tax hurt our ability to remain competitive and invest in our employees and customers.”

Joe Brennan, president and CEO of the Connecticut Business and Industry Association, said the reaction from the corporate community is the result of building frustration and is unlike anything he’s seen in almost three decades on the job.

“In my mind it’s unprecedented to have these major, iconic Connecticut institutions say the things that they said,” Brennan said. “They’ve had their taxes raised in Connecticut before. I’ve never seen a reaction like this.”

Now is not time to increase taxes on businesses, according to Brennan. “Coming off the largest tax increase in state history four years ago, given the fact that our economy hasn’t rebounded, we have the highest unemployment rate in New England, and we haven’t recovered the jobs we lost in the last recession, we just didn’t think it was the right time to be raising taxes,” he said.

Klarides said she’s surprised the corporations haven’t moved already. “I have no idea how they sit everyday having no certainty about the climate in this state and seeing the road down which we’re going,” she said.

While Senate President Martin Looney said the companies “doth protest too much” with suggestions that they’re going to pack up and move, both Brennan and Klarides disagreed.

“I believe that day is sooner than the Democrats and the governor believe it is,” Klarides said.

“It’s not protesting too much,” Brennan said. “I think there’s just a building frustration.”

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(24) Archived Comments

posted by: UConnHoop | June 4, 2015  4:12pm

You talk about having your head in the sand and outright lying to the people of the State of CT.  The Dems have no shame!

posted by: art vandelay | June 4, 2015  4:31pm

art vandelay

The bottom line is that all will be forgotten come November 2016.  Every Democrat up for re-election will be voted back into office.  Democrats will again control the Legislature. Governor Malloy will be in Washington when the next Democrat President is elected.  Nancy Wyman will inherit the mess. We’ll be in a deeper financial mess and taxes again will be raised.  The cycle will continue until bankruptcy is declared.  Voters have a very short memory and don’t care.

posted by: LE 2015 | June 4, 2015  5:45pm

Looney only cares about lowering his own car tax. He does not care about anyone else. Calling that companies are just complaining or saying static shows how smug they are.

posted by: NoNonsense | June 4, 2015  6:56pm

Malloy says he won’t veto the budget. This is news? Of course he won’t veto it, he negotiated it with the Dem leadership. And it won’t surprise me if he takes no action and just lets it go into effect. Rell did the same thing at least once. Then he can say, “I didn’t raise taxes, the legislature did it.”

posted by: Noteworthy | June 4, 2015  7:30pm

Two things strike me after reading this article:

1. Malloy is a seasoned liar whose ability to own his own budget, that his people negotiated with his approval and offer to help jam through, is jawdropping. This version, keep in mind, is the afterbirth from his own budget that was unbalanced in its submission.

2. Speaker Brendan Sharkey’s dismissal of Aetna as “static” when the company pays $65 million a year, and whose tax bill will rise more than $15 million/year to some $80 million. At very least, Sharkey owes some deference. But this level of disrespect and dismissal of concern is very concerning.

The bottom line is that $2 billion in new taxes has been levered against CT taxpayers. It’s a big bill and a heavy burden.

That’s why our neighbors have lower unemployment, better GDP growth. Our growth has been less than one half of one percent across the last four years. With this budget, that performance will continue and in fact, get worse if the loss of jobs really materializes. Playing whose got the bigger one will only hurt us and make those responsible look foolish. Just stop it.

posted by: oldtimer | June 4, 2015  8:12pm

Both my state representative and state senator are Republicans. Malloy and the Democrats shut the Republicans out of the budget negotiation process. Isn’t this taxation without representation? Was that not the cause of the Boston Tea Party and ultimately the Revolution? But why bother complaining? This budget will soon be red and in two years we’ll be facing another tax increase. The cycle will continue until the state goes bankrupt. Only when the welfare checks and public employee compensation packages dry up will this state of socialism collapse.

posted by: Christopher55 | June 4, 2015  8:38pm

Thanks Dan for sticking it to us once again. You and your fellow Dems are liars, plain and simple.

posted by: art vandelay | June 4, 2015  9:53pm

art vandelay

It would be in Malloy’s best interest not to sign the budget.  He will uphold his campaign pledge NOT to raise taxes by blaming the increases on the legislature.  It would give him a clean slate politically for a position in Washington when Democrats retain the Presidency in 2016.

posted by: Biff Winnetka | June 4, 2015  11:41pm

U-Haul, One-Way Rates for Friday, June 5th, 2015

10-Foot Box Truck

Hartford, CT to Jacksonville, FL
$1,134

Jacksonville, FL to Hartford, CT
$680

It will cost you more to move OUT of Connecticut than to move in.


Even U-Haul gets what a basket case Connecticut is.

posted by: shinningstars122 | June 5, 2015  5:13am

shinningstars122

I hope all of you have or are planning to call the Governor’s office today and ask for him to veto it.

The bottom line is the Democrats own this budget and they think this was the best they could do.

Now you have GE already pulling the trigger forming an exploratory committee on leaving the state, and regardless that corporations here actually are paying the lowest rates in New England as well as the majority of the country, its too late because they can leave or go through an inversion to avoid paying taxes.

This is trickle down economics and Wall Street rule kids as they have us all over a barrel and the Democrats are calling their bluff, but in our own weak state economy we are not negotiating from a position of strength and we can not afford to lose any major employers.

Not one Governor.

Malloy better wake the frak up no matter who he thinks will win the White House.

Veto this budget sir and cap spending now. We all know it will be very tough but it could spur some positive growth sooner rather than later.

Connecticut can not wait another four years to pick up the broken pieces from the last 25 years.

posted by: GuilfordResident | June 5, 2015  6:49am

I have come to believe that there is a class of people in this state who somehow pride themselves on being able to pay any tax hike w/o a hiccup in their finances. I run into a lot of them around the shoreline. Old money types: no job, no debt, tons of matress-money stashed. They enjoy listening to the bickering and groveling of the underclass. I’m sure they say to themselves, “sucks for you.”

posted by: 06416 | June 5, 2015  8:08am

Sure let’s destroy the middle class.  As soon as I’m finished with my BSN I’m moving to Florida and founding New Cromwell.

posted by: Nutmeg87 | June 5, 2015  8:34am

Its really time to leave…  Why would Companies stay here & pay taxes earned out of state?  Mfg left..  Its now Financial Services…  From GE, Aetna, UBS to Private Funds like Lampert…  Whats left is worse than Detroit - at least Michigan panders to big auto…  CT chased out its historic defense & gun industry already ...  Where will all of the voters who benefit from Hartford’s spending going to do when financial services employees all leave? All the small businesses & municipal employees live off the business to the middle class??? 

Ct among 3 states last year that LOST residents…  50% of residents said they want to leave if they could…  And why stay when CT has LARGEST DEBT per Capita in country to pay off… RIP

posted by: oliviahuxtable | June 5, 2015  9:32am

What a lot of hooey….that manufacturing left Connecticut because of taxes….manufacturing left the USA for cheap, overseas labor with little human rights, regulation, oversight. It’s called offshoring and outsourcing. When a company can leave $20/hr jobs and pay some poor person $5.00 a week while charging the same for their products…..and if the business climate allows it, of course they move. More profit.In the 2000s US multinationals shifted millions of good paying jobs overseas….companies care nothing about the USA, or their employees. ...it’s all about the profit. And if our illustrious complaining companies get a chance they will follow and blame it on a tax. Folks, the middle class is being decimated and it ain’t the unions, it ain’t the hard working employees…it is the New Golden Age of Robber Barons, aided and abetted by politicians who love their pockets stuffed with campaign contributions. YOU are being sold down the river. Smarten up before it’s too late.

posted by: Truth_To_Power | June 5, 2015  9:41am

IF Malloy doesn’t care about his CT political career moving forward, and IF he plans to move onto national politics, then why wouldn’t he do the right thing for the people of CT and take steps to change the work/tax environment?

Could it be because he really believes he is doing the right thing? if that’s true, then there are probably others like him running the show, and we are royally screwed.

posted by: whatsprogressiveaboutprogressives? | June 5, 2015  9:43am

SS, it is refreshing to see you make a post that jives with the majority on this board. The likes of Bethy and Bob8/57 are nowhere to be seen. Perhaps they’re trying to rent a UHaul truck or maybe they’ve always been posting from Texas, Florida, or North Carolina.
Regardless, there isn’t much the progressive left can hide from with this budget because it will be painfully evident to all of us in the coming years.

posted by: Nutmeg87 | June 5, 2015  11:38am

Are you kidding ?

Those defesnse jobs went South…  Texas, N Carolina, TN, KY, etc…  Malloy offered $Millions to Bushmaster to come to Middletown, then reneged after Newtown, and they are in MN…  Remington Arms has been consolidating to Alabama..  United Technologies have been moving more mfg to Canada,  Norden Systems left Norwalk to Northrop Grummans VA locations…

You really think Mfg is leaving CT for India or China? American consumers BUY end products from China at your local Walmart…  I dont know anyone who buys a Chinese or Indian firearm, Missle, Aircraft, Tank, Ship, Sub, Ammunition….  Really?

They leave CT because of TAXES !!!  Now all multinationals with HQ in CT are going to leave because of this new tax regime…  I REALLY DONT THINK GE, AETNA, UBS etc…  ARE GOING TO SEND THOSE EXECUTIVE JOBS TO MUMBAI…  get a grip…

posted by: oliviahuxtable | June 5, 2015  1:31pm

Nutmeg..my friend, who is a nurse at, or should I say WAS
a nurse at a large insurance company here in Connecticut, lost her job… they laid off all of the nurses and they outsourced their telephonic utilization review function overseas….so please don’t say that the insurance jobs are not going overseas… they are. Another friend who worked
as an engineer at a power plant in the greater Hartford area….he had to travel to India to train Indian engineers for HIS job. Millions of good paying jobs have been outsourced and offshored. Sorry if that scares you too much to believe it. And the jobs that are staying here….salaries are stagnant, health benefits have worsened…who ever heard of a $6000 deductible 20 years ago? CEO pay rose 127 times faster than the average worker in the last 30 years! Are you one of those highly paid executives, or a middle class worker? Open your eyes, people.

posted by: Christopher55 | June 5, 2015  4:13pm

The only way this insanity will end is when the “producers” outvote the “takers”

posted by: andygayle | June 5, 2015  7:35pm

Bye Bye Travelers, GE, Aetna, Mass Mutual, etc, etc, etc.
And any retiree that can/

posted by: art vandelay | June 6, 2015  12:53am

art vandelay

@Shiningstars122,
I’m SHOCKED!  You’re one of the died hard liberals who is constantly in favor of big government & taxation to support it.  Why the sudden change?

posted by: dano860 | June 6, 2015  6:31am

Businesses, they leave for numbers of reasons, taxes among them. Infrastructure, labor force, weather, onerous permit applications, excessive NIMBYism but being treated poorly by your host State and lied to by senior management is at the top of the heap right now.
Companies in all States are being courted for transfer all the time, even by Connecticut, but getting anyone to entertain moving into the State is becoming next to impossible.
On the budget vote the other day one of our local Reps said that the Democrats believe that they can be the saviors of ALL in the State. The problem is that they have no clue how to pay for it.

posted by: DrHunterSThompson | June 6, 2015  8:02am

Martin Looney owns this budget at the moment.  if y’all are looking for the one person that had the power to stop the madness, it was Looney.  and he didn’t.  in fact, he exercised a virtually never used senate rule to halt the republican filibuster and call the vote that passed this mess. then, don’t know if he was joking or had been toking a fatty, he called it the best budget in 35 years.

looney lunacy!

now, if the governor signs it, or lets it become law, then he certainly owns it too.  but worse for him, he will have lied straight faced to the residents of connecticut regarding taxation.  liars are the most despicable people, as we all know.

the revolution will not be televised.

HST

posted by: SocialButterfly | June 6, 2015  11:41am

You don’t have to be a liar to be a Democratic political leader in Connecticut but our
Malloy led leadership are all “careless with the truth” and our voters keep reelecting these liars back into office. Why do responsible voters vote when our sell-out voting class leadership will continue to reelect sold their soul Democratic candidates into office? Responsible voters are being sold out and the voting process is a mockery in this state.