Gov. Dannel Malloy defended his planned tax increases in an address to the Waterbury Regional Chamber Legislative Dinner Tuesday night, praising his budget as a tough but effective way to deal with the state’s overwhelming deficit.
The dinner — held at the Crowne Plaza hotel in Southbury — was conceived as a way for local business owners to meet with a group of town executives and state legislators like local State Senator Rob Kane (R-Watertown) and local State Representatives David Labriola (R-Oxford, Southbury, Naugatuck) and Arthur O’Neill (R-Southbury) who were in attendance.
In a speech and question and answer session that lasted roughly twenty minutes, Malloy mainly addressed his budget and its impact on the state’s $3.3 billion deficit. He stressed the $1.76 billion cuts he has made in services and the fact that most of the state’s debts were inherited from past administrations.
“I can remember presentations from four years ago predicting structural deficits, I can remember presentation from three years ago predicting structural deficits… for whatever reason [Connecticut] failed to change the trajectory and direction of the state,” said Malloy.
“Someone has to stand up and say we’ve got to return some sanity, stability and sustainability and that’s what I’m trying to do in this budget,” he said.
Malloy also addressed his plans to raise $1.5 billion in taxes, saying it was not his only plan to find revenue. He admitted it was “where people have a hard time with this budget” but that it was “what I told you I was going to do.”
“It’s impossible to balance the budget by reducing spending by $3.3 billion,” he said. “It’s just not there.”
A lot of that spending, he said, came from the need to repay the state’s pension fund and fulfill their medicaid obligations.
In response to a question about whether businesses could truly economize with increased taxes, Malloy further argued that his increases in income and sales tax left property taxes unaffected and kept the tax burden off municipal governments and manufacturing outlets.
Malloy received a warm reception, but many disagreed with his policies. Such as State Sen. Kane, who praised the governor’s proactive stance, but believed that raising taxes may hurt the economy by driving away business.
“In this economy, you have to give people incentives to create more jobs and lowering taxes is the only way to do that,” said Kane.
State Rep. Labriola agreed, saying that raising taxes sent the wrong message to businesses and that Malloy’s rhetoric did not match his actions.
One businessman at the dinner, Chris Hand, said that if taxes were raised, he would be forced to take his business out of state.
Hand owns and pilots a private jet for a New York-based client he declined to name. Hand said he keeps the jet in Oxford because there is no sales tax on a plane his size and the jet fuel tax is relatively affordable but if the situation changed he would have to find a hanger in New York.
“I would have no choice,” said Hand.
Hand, a Democrat, said he was concerned for the sake of his crew. Private jets run with three to five crew members who might be out of work, if jets start moving to different states.
Malloy said that his ultimate goal was a more stable business base, but said that the state would be going through a hard transition to get there.
“This is our time to reposition our state, and it’s a unique time if you look on a national basis because lots of states are going through the throes of what we need to do,” said Malloy. “And I believe that if we can get it done this year we can reposition ourselves to be more competitive.”