The budget proposal presented yesterday by Gov. Dannel Malloy relies on record borrowing, budgetary gimmicks and other fiscal slight-of-hand maneuvers that will jeopardize the state’s financial future and struggling economy, said Rep. Themis Klarides.
The proposal included $750 million in borrowing to pay day-to-day expenses, a spending increase of $1.7 billion and an extension of several taxes scheduled to sunset this year.
“With the state currently facing a $2.5 billion budget deficit, it isn’t responsible for the Governor to propose an unprecedented spending increase of nearly 10% while we borrow over $3 billion just to cover operating and other expenses,” said Rep. Klarides, a member of the Appropriations Committee.
“Our families use common sense budget principles everyday by living within our means and borrowing only what we can afford to pay back. Government needs to do the same, and this, unfortunately, is a step in the wrong direction.”
“Following Gov. Malloy’s last budget, which produced the largest tax increase in Connecticut history, I was hopeful about his pledge to not increase taxes again. However, he extended several taxes that were scheduled to expire, including the 20% corporate surcharge – creating instability for existing businesses in the state and discouraging new businesses from coming to Connecticut. The message here is clear: Connecticut is not open for business.”
She added “While eliminating the car tax sounds like a good idea on the surface, I am very concerned this will significantly shortchange municipalities who will be forced to raise property taxes – essentially creating a fancy shell game.”
Other aspects of Malloy’s budget include:
• Continuation of the electric generation tax, likely to result in more than $80 million passed on to families and businesses.
• Avoids exceeding the Constitutional Spending Cap by moving $900 million in spending outside of the cap.
• Bonds $1.5 billion in FY 14 and $1.6 billion in FY 15.
• Pushes off Economic Recovery Notes payments. $300 million in bonding that will be moved from the next two years into the outyears.
• Bonds Pay-As-You-Go transportation projects - $20 million a year.
• Implement Tax Amnesty program for $25 million.
• Eliminates $24.9 million in school transportation and adds a $5 million regionalization grant
• $47 million grant to municipalities to make them whole.
• Eliminates $94 million in municipal revenue sharing grant (AKA manufacturing machinery and equipment grant / property tax relief).
The $43.8 billion biennial budget was unveiled to the State House of Representatives and State Senate in a joint convention of the legislature yesterday by Gov. Malloy.
The budget proposal is now sent to the legislature’s Appropriations Committee for further consideration. The General Assembly has until June 5 to pass a balanced budget.