HARTFORD, Conn. (AP) - State lawmakers planned to vote Monday on a two-year, $43 billion state budget proposal that Democrats predict will put Connecticut on a path to fiscal stability, but one Republicans argue is a hodgepodge of ideas, increased spending and higher taxes that repeats the state's past financial mistakes.
By mid-afternoon, the Democratic-controlled House of Representatives had begun what was expected to be a lengthy debate on the massive 550-plus-page bill, which also includes numerous public policy initiatives, including compromise language on a paid family medical leave program. The legislation was finalized last week by Democratic legislative leaders and Democratic Gov. Ned Lamont following closed-door negotiations that didn't involve the General Assembly's minority Republicans.
The planned vote comes days before Wednesday's midnight legislative adjournment deadline. If the bill passes, as expected, it's unclear when the Senate will vote.
Democrats made note of how the bill preserves about $2 billion for the state's budget reserve account, money that can blunt the impact of any future recession. It also includes the groundwork for a tentative legal settlement Lamont reached with the state's hospitals to ward off what could be an expensive court decision. And the plan reschedules teacher pension payments to address a major underfunding problem.
"Those three things I think are really a big, big linchpin,'' said Democratic House Majority Leader Matt Ritter of Hartford, when asked if this budget plan will finally end Connecticut's string of deficits and appease business interests, who've complained for years about the unpredictability of legislative decision-making and budget-making. This budget covers an estimated two-year, $3.7 billion gap.
But Republicans were skeptical of the Democrats' optimism, arguing the legislation does nothing to grow the economy or spur business creation and employment, especially with other legislation they see and anti-business, including the recently signed minimum wage increase.
"This budget increases spending. This budget increases taxes. And this budget allows for an increase in borrowing,'' said Rep. Christopher Davis, R-Ellington, who called the bill an "attack'' on small businesses and middle class taxpayers. "These are the things that have gotten us into this problem that we're facing (over) so many years and so many decades.''
Here's a look at some of the highlights of the plan:
TAXES
The budget plan includes a variety of tax increases, which add up to about $2 billion over the two-year budget.
A big chunk of that $2 billion comes from a tax on hospitals, which is part of the tentative agreement Lamont negotiated with the Connecticut Hospital Association.
While much shorter than Lamont's budget, unveiled in February, this plan still extends the state's 6.35% sales 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; increases the sales tax from 1% to 6.35% on digital downloads; requires the state's occupancy tax to be charged for short-term rentals, such as Airbnb; imposes a 10-cent surcharge on single-use checkout bags; and a 10% excise tax increase on alcohol at the wholesale level.
The bill doesn't include a capital gains tax on higher income taxes on the wealthy, but it does make tax changes that target higher income residents. It includes a version of a so-called mansion tax, a surcharge on the real estate conveyance tax paid for properties that sell for more than $2.5 million that would be refunded in the form of a tax credit for those homeowners who remain in Connecticut. There's also a proposal to tax earnings of people who form limited liability companies and don't pay the corporation tax. There's disagreement about whether this will target wealthier taxpayers who may have already benefited from President Donald Trump's federal tax cuts or hurt small business owners.
The bill also requires the secretary of the Office of Policy and Management to come up with $50 million in possible fee increases.
SPENDING
The budget proposal spends a total of about 2% more, or nearly $430 million, in fiscal year 2020 compared to the current fiscal year. In the second year, spending grows by 3.7% or nearly $781 million.
Republicans criticized the spending levels, claiming the plan funded lawmakers' pet projects at the expense of key programs, such as expanding slots for daycare services for low-to-moderate income families and programs that serve people with disabilities.
"We just can't afford, year to year, to do these things and ignore core functions of government,'' said Senate Republican Leader Len Fasano of North Haven.
However, the plan increases state funding for programs like methadone maintenance clinics, health care for needy adults, funeral expenses for the indigent, magnet school funding, and nursing homes, which are facing a possible strike over wages and benefits. There's also roughly $100 million more for state employee salary increases.
"Look, we're really proud of the document that came out,'' said Democratic Speaker of the House Joe Aresimowicz of Berlin. "It's coming out on time, balanced, and makes investments in our municipalities through education and workforce development.''
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