Budget Proposal Sets Stage for Huge Tax Hikes
The General Assembly’s Appropriations Committee today approved a budget proposal that obliterates the state’s constitutional spending cap, the last best hope the tax paying public has to hold back ever-increasing taxes.
The committee approved the proposal–which exempts more than $2 billion in annual contributions to state employee pension and retirement benefit programs–on a party-line vote, with all Democrats approving and all Republicans opposing it.
That $40.6 billion, two-year proposal spends $514 million more than Governor Dannel Malloy proposed for the first year of his budget and an additional $278 million in the second year.
Committee chairs Senator Beth Bye (D-West Hartford) and Representative Toni Walker (D-New Haven)–pictured above–said that based on their interpretation, spending was now $1.5 billion under the cap.
CBIA president and CEO Joe Brennan warned that the committee’s budget dramatically raises state spending to unsustainable levels while setting the stage for huge tax increases.
“We have said from the beginning of the session that the only way to properly deal with the state’s fiscal problems is to encourage greater economic growth,” he said.
“This proposal adds over $1.5 billion in new spending over two years. It is unsustainable and sets up taxpayers for enormous tax increases.
“It will make it infinitely more difficult to attract the investment we need to grow jobs.
“In addition, the proposal violates the spirit of the constitutional spending cap and is an affront to the more than 80% of Connecticut voters who supported a measure of control over spending and the taxes needed to pay for it.”
The spending cap was implemented in 1992 in reaction to anger over the introduction of the state income tax the previous year.
Voters adopted the cap–designed to keep spending in line with the annual growth in personal income or inflation–as the 28th Amendment to the State Constitution.
The Democrat-controlled Finance Committee is expected to release a tax package on Wednesday to match the Appropriations Committee’s spending package.
Governor Malloy’s proposed budget included $900 million in proposed revenue increases over two years, with businesses hit by more than $496 million in tax hikes.
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