Dems say voters will 'forgive' new taxes; GOP predicts 'anger'

With the dust barely settled on the 2011 legislative session and $1.5 billion in tax hikes just over three weeks away, majority Democratic lawmakers predicted Thursday that voters would appreciate the fiscal stability--both in state and local government--and forgive a modest imposition on their wallets.

But Republicans, who spent their first session dealing with a Democratic administration in two decades, said Gov. Dannel P. Malloy broke his campaign promises and bullied the legislature into a plan that would push already overburdened taxpayers over the edge.

"Tough choices were made, but there were no gimmicks," Senate President Pro Tem Donald E.Williams Jr., D-Brooklyn, said, adding that "we didn't savage spending" for programs that assist those most in need, or for grants to help cities and towns keep local taxes under control.

"Shifting costs to towns? What happens?" he added during a mid-morning press conference outside of a shopping mall in Bloomfield. "Local property taxes zoom and people pay through the nose."

"We worked hard to protect municipalities and property taxpayers across the state," House Speaker Christopher G. Donovan, D-Meriden, added. "Who gets hurt by property tax increases? Small businesses."

Though about 60 percent of the total tax hike comes from the income tax, Donovan said other increases, such as boosting the sales levy from 6 to 6.35 percent and ending exemptions on clothing and other items, won't produce public outrage.

"We're asking people to embrace their city, their state," he said, adding that the income tax plan asks those who most can afford it to pay more. "We're all kicking in."

But Senate Minority Leader John P. McKinney, R-Fairfield, said during a mid-day rebuttal back at the Capitol that when residents pay more in income, sales, and a host of other taxes, they will vocalize their own pain. "We're going to see a lot of anger and frustration and a lot of difficult questions about why we're doing this now, at such a difficult time," he said.

Malloy took the first opportunity to offer his take on the just-completed session, meeting with Capitol reporters early Thursday that the struggle to put Connecticut's fiscal house in order and invigorate its economy largely was a success, though the need to do more to create jobs ranks as a mild disappointment.

"I did a lot of things I'm proud of," Malloy said, citing new job creation tax incentives, an $864 million planned expansion of the University of Connecticut Health Center and a new authority to market Bradley International Airport. "It was the best session I ever had," quipped the governor, who never served in state government before this year.

Still, the governor announced he would work with his department heads and private business leaders all summer developing more initiatives to create jobs, and then call lawmakers back into special session this fall to enact them.

Though Malloy talked about tax hikes as a "last resort" during the past fall's gubernatorial campaign, he called for $1.5 billion worth of increases just one month into the job, said House Minority Leader Lawrence F. Cafero, R-Norwalk. "His actions didn't jibe with his rhetoric," he said, adding it's no surprise now--given the adopted budget and paid sick leave measure--that Malloy says not enough has been done to create jobs. "Now I think they might be a little embarrassed about it."

But Republicans argued that tax increases weren't the only threat to Connecticut's economic future launched in this past session.

A bill that requires most companies to provide paid sick leave has been decried by the Connecticut Business and Industry Association as a dangerous mandate that will scare companies away from the state. But Malloy rejected that premise, saying it's important to give all residents a basic benefit that more than three-quarters of Connecticut workers already enjoy. CBIA officials "warn people of threats that don't exist and they are pretty good at it."

McKinney cited a letter from a constituent who has opened five restaurants in Connecticut, and who now believes the paid sick leave requirement will cost his business an extra $20,000 per year. "Governor Malloy and the Democrats have taken this state in the wrong direction: higher taxes and anti-business mandates."

Malloy enjoyed strong support from labor--which has fought for the paid sick leave mandate for the past five years--and Cafero said the first Democratic governor since 1990 got the Democrat-controlled legislature to follow all his wishes.

"The governor wanted it, he got it. That was the deal this session," the Norwalk Republican said, adding Malloy and Democratic lawmakers excluded Republicans from negotiations in all key bills. "His governing style is, 'This is my world. You're just living in it.'"

One big question mark still lingering over the state's finances is the tentative labor concession deal that the administration insists would save $700 million next fiscal year and $900 million in 2012-13.

State employee unions aren't expected to finish their ratification votes before June 24 and Malloy already has said that if the deal is rejected, he would consider well above the 4,700 layoffs he had planned before a tentative package was announced.

"I'm not bullying anybody," the governor said Thursday of his recent warnings that massive layoffs would be unavoidable if the deal is rejected. "Talking in real terms and telling the truth is not bullying."

But with or without concessions, he added, "we're going to have a balanced budget."

"I think the state employees understand (the fiscal crisis) and they will do the right thing," Donovan said. When asked if he and Williams would approach unions directly and appeal for concessions, the speaker added that "if we are asked to come visit, we'll be happy to come and talk about the impact on the budget" if concessions are rejected.

But McKinney said if Democrats truly were comfortable with the concession package and aggressive savings assumptions made by the administration, they wouldn't have buried a provision effectively ratifying the deal in advance in a  277-page budget implementation bill passed during the last week of the session, rather than waiting until after unions accept or reject the deal. Republicans cried foul earlier this week when Democrats moved forward with the bill even though nonpartisan legislative analysts reported that they lacked sufficient information to confirm more than 60 percent of the purported savings.

"They clearly did not want one vote just on this issue," McKinney said.

Democrats praised efforts this session to offer ban discrimination against the transgendered community, offer sentence reductions to inmates who participate in re-entry programs, offer in-state tuition rates to students without legal immigration status, and decriminalize possession of small amounts of marijuana.

Malloy also said Thursday that "in all probability" he would sign a controversial bill that swaps 17 acres of state land near the Riverhouse at Goodspeed Station in Haddam for 88 acres adjacent to the Cockaponset State Forest, also in that community. A private firm wants to use the state land, which has been preserved for its environmental value, for industrial development.

The governor and his administration had been relatively silent about the proposed deal during the session, and Malloy said Thursday that "I really hadn't had a lot of time to work on that issue."