This state already places and insurmountable tax burden upon our residents. To ask any more is unconscionable.
All of my Republican colleagues, and even 11 Democrat legislators, shared this sentiment when we voted against the Democrat-proposed tax hike today. Unfortunately, this was not enough to steer the State of Connecticut off its self-destructive path; the bill passed the House this morning by 3 votes and was transferred to the Senate for consideration. [The budget ultimately passed, 19-17. — Ed.]
The proposed budget increases state spending by $784.5 million from the current year, obliterates the constitutional spending cap, unfairly and unnecessarily raises taxes on the middle class through varying devastating capacities, and also increases the tax rate on personal income – resulting in total income tax increases of about $450 million over two years – hampering residents and small businesses across Connecticut.
Sales tax exemptions on goods and services such as clothing, footwear and car washes are being lifted, while still maintaining the state’s 6.35 percent sales tax, despite earlier reports that the rate would be reduced to offset the loss of these exemptions.
Sales tax on World Wide Web transactions are being raised from 1 percent to 2 percent in FY 16 and 3 percent in FY 17 (a combined revenue of $47.9 million), significantly impacting purchases of software or iTunes downloads, etc.
Certain tax credits will also be reduced. For example, the current $300 Property Tax Credit maximum will decrease to $200, which impacts so many homeowners in the state, specifically in our district, and comes on the heels of a previous reduction from $500 in 2011.
Troubling corporation tax changes are also being made. This budget establishes a mandatory combined tax reporting on corporations that own several smaller companies, creating an additional $62.3 million tax by FY 17. One particular corporation impacted by this mandate is General Electric (GE), a conglomerate corporation headquartered in Fairfield. GE, followed by Aetna, Traveler’s Insurance, and ever-present in our district Boehringer Ingelheim, released statements Monday against the proposed budget – quite a rare occurrence.
GE warned the public that the proposed tax increases are “truly discouraging,” and that the company would “seriously consider whether it makes any sense to continue” to remain in Connecticut. Even more worrisome for our district, Boehringer Ingelheim conveyed similar negative sentiments to the budgetary changes, raising concern that they may also consider moving elsewhere.
“It is essential that Governor Malloy and legislative leaders find a more prudent and responsible path forward for Connecticut and its residents in their current budget negotiations,” the company said.
If these proposals didn’t hit close enough to home already, it is even further inconceivable to think of how this budget will devastate Danbury Hospital, one of our district’s precious resources. More than $400 million will be added to the hospital provider tax. In addition, Senate Bill 811, which recently passed the State House and Senate without my support, places another mandate on hospitals by requiring them to comply with new regulations regarding the electronic reporting of confidential information. It also makes the process of transferring ownership of a hospital in financial need much more involved, lengthy, and therefore discouraging by requiring a hospital to submit a letter, application, and bring their request to a public hearing.
In a recent legislative survey I sent out to my constituents, an overwhelming number said that they believed the state has an obligation to keep its spending under the constitutional spending cap, and that the state needs to cut its spending. They also called to increase financial support for transportation, but protect Connecticut’s hospitals from being further taxed in order to accomplish this.
I am disappointed that the interests of my constituents were not preserved by the majority party this legislative session. I am now left with only one more question: What happens to the state of Connecticut now?
Rep. Stephen Harding represents Connecticut’s 107th House district which includes Danbury, Brookfield and Bethel.