Connecticut Senate sends Democratic budget to governor
HARTFORD, Conn. (AP) — A two-year, $43 billion state budget cleared the Connecticut Senate Tuesday and advanced to the governor’s desk mostly along largely party lines, marking a departure from two consecutive years of bipartisan budgets.
The bill passed on a vote of 20-16, with two Democrats joining the Republicans in opposition.
During the nearly eight-hour Senate debate, some Republicans accused the majority Democrats and Democratic Gov. Ned Lamont of purposely crafting the final budget deal without GOP input for partisan reasons and to push through pet policies, criticizing the budget for increasing taxes, spending and borrowing.
“How much better would this budget have been if we had all been able to be at the table,” lamented Sen. Paul Formica, of East Lyme, the top Senate Republican on the General Assembly’s Appropriations Committee.
Formica had been the Senate’s co-chair of the committee last year when Democrats and Republicans held an equal number of seats. Democrats now have a 22-14 majority in the Senate.
Democratic Sen. Cathy Osten, of Sprague, the committee’s sole Senate chair this year, insisted Tuesday the budget proposal is fiscally responsible and honors the past bipartisan budgets, funding such popular initiatives as financial assistance to help certain seniors cover Medicare expenses and a planned, expanded income tax exemption for Social Security income. At the same time, she noted the budget’s rate of growth is lower than in previous bipartisan budgets; that it sets aside $2 billion in the state’s budget reserve account, an amount that’s predicted to grow to $2.6 billion; and that it restructures teacher pension payments to smooth out anticipated spikes.
“It’s the most fiscally responsible budget in Connecticut history,” Osten said. “There’s no reason why we cannot support this together.”
Senate Republican Leader Len Fasano of North Haven bristled at any claim the proposal was bipartisan. He said Democrats made it clear at the beginning of the legislative session they were going to use their majority to push through policies like paid family medical leave and a higher minimum wage, as well as their budget, without listening to the Republicans and their ideas.
“If you stood in the way, you got trampled. And if you questioned, you got accused. And If you said what if, you’re stalling,” Fasano said.
Throughout the debate, Republicans echoed concerns voiced by their House colleagues during Monday’s debate about how the package increases taxes by about $2 billion over two years. Roughly half of that comes from a tax on hospitals, part of tentative agreement Lamont reached with the Connecticut Hospital Association to settle a pending lawsuit against the state. The GOP argued that Democrats are repeating past fiscal mistakes that contributed to the state’s string of budget deficits. This plan covers a projected $3.7 billion gap.
“This is history repeating itself again and again,” said Republican Sen. Heather Somers of Groton. “There’s no relief, there’s no hope for working people in the state.”
While the bill doesn’t change the sales tax rate, it extends the 6.35% tax to more goods and services, including dry cleaning and laundry services, interior design services, and some parking. It also imposes a 1% tax on prepared foods and beverages, including restaurant meals; requires the state’s occupancy tax to be charged for short-term rentals, such as Airbnb; and includes a 10% increase in the excise tax on alcohol at the wholesale level, excluding beer.
It also includes a tax increase on so-called pass-through businesses, such as LLCs, partnerships or S-corps. Republicans argued Tuesday that will essentially increase the personal income taxes of owners of small businesses, from restaurants to health care practices, by 0.5% — not the wealthy as some Democrats have suggested.
“We’re not going to tax capital gains. No, we can’t do that,” said Republican Sen. Gennaro Bizarro of New Britain, referring to a proposal originally pushed by the General Assembly’s Progressive Caucus but opposed by Lamont. “But we’re going to slam the middle class. Where is the outcry?”
Democrats, meanwhile, lauded their budget plan for increasing state aid for local education; phasing out an annual $250 business entity tax; funding various job training programs; protecting state aid to cities and towns from cuts for two years; funding plans for a new paid family medical leave program and new increases in the state’s minimum wage; funding to staff welcome centers and highway rest areas; and including a plan for debt-free community college program in the second year.
Senate President Pro Tempore Martin Looney, D-New Haven said the budget bill “does respond to the needs of the people of the state and truly does keep faith with them.”