You can read House Speaker Brendan Sharkey's response here:
You can also read the governor's budget for yourself here:
So, as promised, Gov. Dannel P. Malloy delivered a revised budget plan for Fiscal 2017. While it does manage to balance the budget, it's hardly an understatement to say it wasn't well received by his own party in the legislature.
You can read House Speaker Brendan Sharkey's response here:
You can also read the governor's budget for yourself here:
So, the Appropriations Committee had a deadline of Thursday to put forward its plan to fix the gaping (and potentially growing) $930 million hole in the budget for the 2017-18 fiscal year. Unfortunately, the best that committee could do was plug about $570 million of it, leaving a $360 million gap.
You can see their plan here:
The committee voted 33-24 to approve its plan. Voting in favor from the local legislative delegation were Sen. Joan Hartley, R-Waterbury, and Sen. Dante Bartolomeo, R-Cheshire. Voting against were Sen. Rob Kane, R-Watertown, Sen. Joe Markley, R-Southington, and Rep. Arthur O'Neill, R-Southbury.
The Democrat-controlled committee also managed to upset Gov. Dannal P. Malloy in the process, because they dared to use funding for his transportation projects as part of their proposed fix. So much for a lockbox.
That led Malloy to announce he plans to take the unusual step of issuing his own revised budget plan next week.
He made that announcement even before the Finance, Revenue and Bonding Committee issued its budget fix plan, which officially is due by today. That plan likely won't make him any happier than the Appropriations Committee plan, because it includes new taxes and fees -- including an 8.75% surcharge on Fantasy Sports and imposing a sales tax fee on retailers.
The Finance committee voted 30-21 along party lines to approve its fix.
You can read about that here:
Meanwhile, the first state government employee layoffs have been announced: 147 workers in the Department of Correction.
You can read that here:
One of the bills the Waterbury Regional Chamber is following closely is SB 399, "An Act Concerning Research & Development Tax Credits."
The bill is necessary because the legislature, during its special session last year, voted to reduce the credit to 50 percent and then slowly raise it back to 70 percent over a four-year period. SB 399 would restore the full credit in three years, not four.
The Chamber submitted testimony in support of this legislation last month. We believe restoring the credit to 70 percent is important because all of our neighboring states offer the credit at this level. In addition, a state study found that the R&D tax credit has an eye-opening 30-to-1 return on investment for the state's economy, making it one of the most beneficial credits of its kind.
The Finance, Revenue and Bonding Committee today voted unanimously in favor of the bill. The vote was 20-0, with one legislator absent (Rep. Tony D'Amelio of Waterbury). Members of the local legislative delegation on the committee who voted in favor of the bill were: Co-Chair Sen. Joan Hartley, R-Waterbury; Sen. Joseph Crisco, R-Woodbridge; Rep. Selim Noujaim, R-Waterbury, and Rep. Rob Sampson, R-Wolcott.
The bill still has a long way to go before it becomes law, but the unanimous, bipartisan support from the committee is a hopeful sign.
Anyone with an interest in what's happening with the state's finances would have learned a thing or two this morning, thanks to the terrific presentation by Commissioner Kevin Sullivan of the state Department of Revenue Services.
Sullivan was the guest speaker for the April meeting of the Chamber's Public Policy Committee this morning, and it was no April Fool's joke. Members of the committee (which regularly meets on the first Friday of the month), got to hear his thoughts on a number of state budgetary issues, ranging from the reasons tax revenue has fallen, to the viability of tax credits, to his thoughts on why General Electric chose to move its HQ to Boston.
Here are some highlights:
* Tax revenue is down primarily because, a) there is a "tangible and meaningful out-migration" of people from the state, and b) we've replaced a lot of high-paying jobs with much lower-paying jobs.
Sullivan noted that in December 2015, the state collected $173 million less in income tax revenue than it collected a year earlier. Ouch.
* Legislators love tax credits, but he's not a fan of them, saying that, with some exceptions, most have no "demonstrative value" to the economy. One credit he likes is the Research & Development credit, and that's no surprise, since a study shows the R&D credit has a 30-to-1 return on investment. I recently filed testimony with the Finance, Revenue & Bonding Committee in support of SB 399, which would restore the R&D tax credit to its full 70% value within the next two fiscal years.
In answering a question from Jack Traver Jr., of Traver IDC in Waterbury, Sullivan did say he supports applying certain tax credits (including the R&D tax credit) to all companies, including S and C corporations.
* One of the better points he made is that the tax code in every state, and the federal code for that matter, "has been written for an economy that no longer exists." He said tax codes need to be updated to the service-industry dominated global economy of the 21st Century.
* As for GE, he noted that when compared to a major state employer like United Technologies Corp., GE is a minor employer in Connecticut. He also noted that while moving GE's HQ to Boston means a loss of about 500 jobs in Connecticut, it still will have 5,000 production jobs in the state and losing those jobs would have hurt a lot more. He also said GE narrowed its choices for relocating its HQ to three "high-cost states," and ended up choosing Massachusetts — where, if not for its $145 million in tax breaks, its tax burden would be higher than it was in Connecticut.
In summing up his presentation, Sullivan noted what most of us already know, but which the state legislature apparently still needs to come to grips with: with the continued decline in revenue, the state "is going to have to start doing less with less."
As you are probably aware by now, the House followed up on the Senate's 33-3 vote by approving the budget fix amendment by a 127-16 vote Wednesday evening. The governor signed the bill later that night.
It is interesting to note that of the 16 no votes, one was cast by Rep. Rob Sampson, R-Wolcott. He was the only legislator from the Chamber's region to vote against it.
If you want to look at the bill, how each legislator voted, fiscal notes and more on this budget fix (officially SB 474), you can find it all right here on the state's website:
The state Senate this afternoon overwhelmingly approved a bipartisan plan to close the $220 million budget gap. The vote was 33-3.
Of the three who voted against, two were legislators from our area: Senator Joe Markley, R-Southington, and Sen. Dante Bartolomeo, R-Cheshire. (The third was Sen. Art Linares of Westbrook.)
Also, the approved bill would release the withheld $140 million in payments owed to the state's hospitals.
You can read all about it here:
The House still has to vote on the bill.
As you probably read here ...
... the state employee unions have so far refused to meet with Gov. Dannel P. Malloy or any of his representatives to negotiate concessions, which could potentially help the state avoid making thousands of layoffs.
As the story notes, state officials have estimated that laying off 2,000 to 3,000 union workers will be necessary if they don't get concessions.
And as you can read here ...
... these layoffs are much more likely now that the budget deficit is $130.8 million,
The union's position is that the state should consider raising taxes, again, to help fill the gap. It would appear the unions have failed to notice just how poorly raising taxes has worked as a budget fix over the past four years.
Instead, cuts have been proposed that will hurt just about everyone — except, that is, for state workers. Yes, they have a contract that is locked in until 2022, but you would think the threat of losing as many as 3,000 members of the rank and file would be a motivator to negotiate.
It's a dangerous game of chicken the unions are playing. And while I understand their desire to make the state honor the agreement they have, they seem to be standing on principle at a very high cost.
The concessions that have been proposed are reasonable: pay more toward their health insurance and pensions. It's what the rest of us have had to endure, though some of us lost our pensions in lieu of 401(k) plans years ago. Is that really worse than watching 3,000 of your fellow union members being laid off?
Most of us wouldn't think so, but that's not how unions seem to work. Take Hostess, the former snack cake company. Its union workers went on strike over wage cuts, refusing any concessions. Result: Hostess went out of business, sold off its brand names and recipes in bankruptcy court, and every union worker lost his or her job.
That's a lot like standing on the deck of the Titanic and loudly claiming it is unsinkable just after the ship has hit an iceberg. At some point, you have to head to the lifeboats or go down with the ship.
I hope the state employee union's rank and file knows how to swim.
You may recall I mentioned this legislation, also knwon as the "Walmart Tax," in s previous post. The latest isn't good: the Human Services Comittee voted 10-8 on Tuesday to send the legislation, Senate Bill 391, to the full legislature.
It's worth noting that Sen. Joseph Markley, R-Southington, and Rep. Lezlye Zupkus, R-Prospect, voted against the bill.
As I mentioned earlier, this bill would charge companies with 500 or more employees $1 for every hour those employees work for less than $15 an hour. Estimates say the cost to these employers could range anywhere from $100 million to $305 million. Quite a windfall for the state's General Fund.
This is a back-door way of pushing the state's minimum wage to $15 an hour. Unfortunately, what is likely to happen is that affected companies — which will include restaurant chains — will make up for the financial penalty by cutting jobs and raising prices.
There is still time to contact your legislator and ask them to reject this anti-business, job-killing bill. Call their offices or send them an email. You can find contact information here:
Gov. Malloy's proposal to get the state Department of Motor Vehicles out of the local tax-collection business has been rejected by lawmakers.
The proposal, which spurred the chief executives who sit on the Naugatuck Valley Council of Governments to propose drafting a letter against it because it could potentially cost communities statewide some $34 million in property tax revenue, was rejected Monday by the Transportation Committee.
According to the Republican-American, the committee removed the proposal from House Bill 5055, which mainly addresses wait times at DMV offices. Removing the provision means that tax delinquents will continue to be unable to get a vehicle registered until they pay up.
Why the objection? Take Waterbury as an example. The city estimated it would lose $12 million a year in back tax collections.
The revised bill was unanimously voted out of committee and sent to the House for further action.
The state Department of Labor has issued its revised report on the state's labor market for 2015, and the numbers (surprise) are not nearly as good as was first thought. Somehow, they overestimated the job gains by more than 14,700. That's a bit more than a rounding error; in fact, it's a downward revision of 54.6 percent!
Read the gory details here:
Public Policy & Economic Development Director, Waterbury Regional Chamber