Sharkey Admits Mistakes Were Made In Balancing Budget
by Elizabeth Regan | Nov 5, 2015 4:00pm
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Posted to: Business, Economic Development, The Economy, Energy, Jobs, Labor, Nonprofits, State Budget, Special Session, Taxes, State Capitol
House Speaker Brendan Sharkey is leaning on the business community for comprehensive and specific recommendations about how to balance the budget in order to avoid the kind of “bad decisions” that get made when lawmakers are left to their own devices.
Sharkey asked members of the Commission on Economic Competiveness on Thursday for “real time input” as he works with a bipartisan group of lawmakers and Gov. Dannel P. Malloy’s administration to close a $350-370 million mid-year budget shortfall. He would like commission members to be “on call” as advisors throughout negotiations, which are likely to continue until a special session is held in mid-December.
Sharkey said his request is the result of lessons learned after lawmakers produced parts of a revenue package that were “not well thought out” and “fully vetted” in their rush to come up with a balanced budget at the end of the General Assembly’s regular session in June.
That two-year, $40.3 billion budget with nearly $2 billion in tax increases was negotiated behind closed doors by Democrats and narrowly approved by the General Assembly on June 3. After a little more than a week of vociferous opposition from the business community, Malloy announced plans to roll back some of the most objectionable taxes. Budget implementation language passed in special session at the end of June ultimately eliminated an increase in the data processing tax and delaying the unitary reporting requirement until Jan. 1, 2016. Lowering the overall two-year tax increase to about $1.3 billion.
“When we were putting the budget together at the beginning of June, decisions were being made in a context that oftentimes happens in this building where legislative leaders and the administration are trying to complete the budget and get to a number that puts us in balance,” Sharkey said. “Oftentimes, that is not a process that is conducive to a) transparency but b) good decision making.”
The extent of the fallout from that decision-making is still unclear as the state waits to see what is going to happen with General Electric, which is headquartered in Fairfield but has expressed interest in leaving the state. The company formed a relocation committee to look at its options after learning in June exactly what was in the initial revenue package.
Sharkey said the commission sitting before him on Thursday is an acknowledgement that “we took a giant step backward, to be frank, in June with the budget that we produced and I want to avoid that mistake from happening again.”
The 13-person commission was created by statute this year in the same special session during which lawmakers revised the revenue package businesses said was so harmful to the state’s economic competitiveness.
The committee is co-chaired by state Rep. William Tong, D-Stamford, and Joe McGee, vice president of public policy and programs at The Business Council of Fairfield County. It includes members representing state, business, labor and academic interests.
The group is tasked with examining how Connecticut’s policies, including those pertaining to taxes and regulations, impact businesses in the state.
Connecticut Business & Industry Association President and CEO Joe Brennan, a member of the commission, thanked Sharkey for creating the group and reaching out for their advice.
“I think it’s important to note it’s not a commission on business competitiveness but a commission on economic competitiveness, because that shows that it goes hopefully to the benefit of everybody in the state: not just the business community but employees of companies, those who rely on state benefits for their existence, (and) so many of the other investments the state needs to make,” Brennan said.
The business advocate called for “dispassionate discussion” not only on tax policy, but on far-reaching issues like transportation and energy.
Sharkey agreed with the need for that kind of dispassionate viewpoint so that decisions are based on a comprehensive, thoughtful approach instead of “who’s screaming the loudest.”