Gov. Dannel P. Malloy offered a controversial budget proposal Wednesday that would eliminate car taxes for lower-priced automobiles, continue tax hikes on corporations and electric power plants, increase state spending by nearly 10 percent over two years, and encourage homeowners to switch to natural gas with a $500 tax credit.
During a 38-minute budget address that was interrupted by applause 20 times at the state Capitol, Malloy said the state needs to take a bold approach in funding new programs at the University of Connecticut and helping create new jobs in emerging fields like bioscience.
The proposal provides $125 million for pay raises for about 40,000 unionized and non-unionized state employees, eliminates the sales tax on clothing and shoes priced less than $25 starting in July 2014, and offers a tax amnesty program for those who owe back taxes. In addition, bus fares would increase in January 2014 by 25 cents to $1.55, up from the current $1.30 per ride. The previous two fare increases were in 2005 and 2011.
“I’d like to tell you that this budget solves all of our problems, but it does not,’’ Malloy told legislators in the historic Hall of the House. “What it does is keep us on the steady path to progress.’’
While Malloy and Democrats hailed the budget, Republicans ripped the proposal as a document filled with contradictions, gimmicks, tax hikes, and too much borrowing. Senate Republican leader John McKinney said the only way that the budget could be under the Constitutional spending cap is by changing the definition of the cap, which is what Malloy proposed. McKinney said it was the most dishonest budget he’s seen in 15 years at the legislature.
Although Malloy said the document does not include any new taxes, Republicans countered that it includes old taxes that were supposed to expire but will not.
“By my definition, that’s a new tax,’’ said House Republican leader Larry Cafero of Norwalk. “You know, what you say and what you do, in order for people to believe it’s an honest and transparent budget, need to match up. He has said one thing. His actual budget document does another. That’s not transparency.”
Cafero added, “Here’s what I agree with in what the governor said. This budget continues on the path we set two years ago. What he doesn’t realize is that was the wrong path, so what the governor said and what he actually does in the document are two different things. Unfortunately. The governor says he cuts spending by $1.8 billion over two years, but what he doesn’t say is that he’s actually increased spending by almost nine percent over the biennium.’’
With money being shifted around to different pots in spending plans of $21.5 billion in the first year and $22.3 billion in the second year, even veteran Capitol insiders said they remained perplexed. Connecticut Conference of Municipalities chief executive officer Jim Finley said there were so many changes in the categories of funding for cities and towns that he is still not sure whether the overall impact will be good or bad.
“It’s the most complicated municipal aid proposal I’ve seen in 30 years,’’ Finley said.
Cafero referred to the budget as “a gimmick-riddled shell game,’’ adding, “I’ve been here 20 years, and it’s the most tricks I’ve ever seen.’’
But Malloy’s budget director, Ben Barnes, said the proposal had fewer one-shot revenues and less fiscal sleight of hand than budgets by past governors and legislatures.
“This budget is brutally honest,’’ he said. “We have nothing to hide.’’