Budget moves ahead in Senate

Key vote paves way for passage of $41B package

HARTFORD — In a key vote setting the Senate on a path to approve a new state budget, the legislative Finance Committee Wednesday afternoon overwhelmingly approved enough taxes to float the twoyear, $41 billion budget.

The lopsided 33-2 vote, with a few members absent, was an early sign before the Senate was scheduled to convene at 8 p.m. that the bipartisan budget compromise was on track to pass and head to the House on Thursday.

The committee action culminated a halfhour debate in which lawmakers admitted they were in a tough spot.

“It’s more important to me what we were able to accomplish in this budget, as far as some of the tax reductions,” said Rep. Chris Davis, R-Ellington, ranking member of the committee.

Eliminating the state tax on Social Security, which would save about $8 million for wealthier retired families; exempting certain pension and annuity income to save another $8.2 million, and phasing in the federal exemption threshold for the estate tax at an estimated cost of $15.6 million in the second year of the budget, are positive actions, he said.

But Sen. Len Suzio, R-Meriden, who opposed the budget, said while there are four tax breaks, there are at least 17 tax or fee increases.

“While the tax breaks total $60 million, the fee increases add up to $450 million,” he said. “I can’t believe we’re voting on this.”

Sen. Toni Boucher, R-Wilton, was the other vote against the tax package, after first abstaining.

“I think there are many of us troubled by the particular process we’re undergoing right now,” she said. “The last thing any of us want to do is to increase taxes on an already overtaxed state.”

Sen. Carlo Leone, DStamford, vice chairman of the committee, stressed that both Republican and Democratic leaders agreed to the compromise.

“It’s been clear that if it was easy, it would have been done many, many weeks ago and on time,” Leone said. A sharp downturn in income-tax revenue created a $3.5 billion deficit that lawmakers have been grappling with for months.

“But the fact is, it’s not easy and people were entrenched on political thought, philosophies, what they thought was important for their community, or just their way of thinking,” Leone said. “I think once that clarity of chaos finally hit home for a lot of people, we realized that we had to start working together.”

While the final budget deal was hammered out by legislative leaders early Tuesday morning, there has been continued discussions, particularly in light of Malloy’s previous veto of a Republican budget last month that included support from several Democrats in the House and Senate.

Malloy was critical of attempts to raid one of his major accomplishments, the so-called green energy funds, from which leaders had planned to siphon off — or “sweep” — at least $140 million in customer payments for natural gas and electricity, for the General Fund. Malloy hinted that the transfers were unacceptable and could be grounds for also vetoing this budget.

While Republican and Democratic leaders said they would rethink their strategy and revise their draft budget, the Finance Committee approved a $28 million transfer from the Green Ban, $20 million from the Regional Greenhouse Gas Initiative and $127 million from the Energy Efficiency Fund revenue.

“Democrats and Republicans share a belief that sweeping funds designated for the Connecticut Green Bank, the Clean Energy Fund and the Connecticut Energy Efficiency Fund are tantamount to a tax on the backs of ratepayers,” Malloy said in a statement before the committee meeting. “I remain committed to our ratepayers and to protecting these funds that reduce energy costs while reducing our dependency on fossil fuels.”

State Consumer Counsel Elin Katz warned that the impact on consumer bills could be large. She said the possible sweep of the funds could end the statewide energy efficiency program, end a rebate program for efficient air conditioners and heaters, create a loss of $22 million in tax revenue and terminate low-income services for 14,000 households.