Bipartisan opposition to state budget leads to long debate process in chambers

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

HARTFORD--Another long night, perhaps even an all-nighter, expected Tuesday at the state Capitol.

The biggest item on the table? The two-year, $40 billion state budget proposed by Gov. Dan Malloy.

In its original form, the budget proposes to raise taxes on businesses in Connecticut, which would generate $700 million over the next two years.

That created what appeared to be bipartisan opposition in the House.

"I do have some reservations obviously, I've always been pro-business," Rep. Tony Guerrara, D-Rocky Hill, said. "I'm concerned about the letters that came out from Aetna, from GE, Travelers and all that." The three companies, three of Connecticut's biggest employers, hinted that if the tax hike passed, they could be moving out.

The budget still includes a tax, called a unitary tax or headquarters tax, which would be slapped onto corporations in the state that also operate in other states. That, combined with an increase in taxes on computer services and data processing appeared to be the last straw for the three major corporations who rarely speak out on political issues. Lawmakers went back to the table to try and has out some issues that caused friction with the companies, but as of Tuesday night, the unitary tax was still on the books. Data processing changed to a 2% increase in the first year to 3% in the second and following year.

"I think [the companies] are a strong constituency group and when they bring something to the table or point something out, we're going to listen, and if we can adjust it we will," said Joe Aresimowicz, House Majority Democratic Leader, Tuesday night.

Connecticut sales tax would also be applied to Internet downloads, such as iTunes music and apps.

Joe Brennan, the president of the Connecticut Business and Industry Association, said there was talk to compromise on that rate hike by only doubling the sales tax. "I've talked to companies, some of the larger institutions in Connecticut that pay five, seven million dollars a year in those taxes," Brennan said. "A doubling of that--it's still significant dollars."

Another concern about the proposed budget is squeezing the middle class again. The tax credit on property for households earning less than $100,000 per year would drop from $300 to $200.

"The only people that are sacrificing, the hardworking people of this state," House Republican Leader Themis Klarides said.

Other taxes include raising the cigarette tax to at least 25 cents with more increases the following years, which was re-introduced as a compromise, for income tax increases on the wealthy being removed from the table.

"I think this is the worst budget I've seen in 17 years of being in the legislature," said Klarides. "I mean, this is horrific."