Connecticut's budget and your business
This is shaping up to be a bizarre budget year (again) to say the least. Democrats in the House and Senate are refusing to negotiate a budget with the governor, while Republicans seem to be getting in line with Malloy's proposal, but may craft their own solution (which will be DOA) to address the deficit. And while politicians are trying to figure out what side they are on, the deficit continues to grow out of control. As the fiscal year draws to a close on June 30, the legislature is looking at a $150 million deficit for the current fiscal year, and another $1 billion deficit on top of that for the new fiscal year beginning on July 1. Just when that sounded bad enough, the General Assembly has to also deal with a 2017/18 hole of $2 billion and another $2 billion deficit for the 2018/19 fiscal year. So in total, the Legislature needs over $5 billion (on the low side) to balance the budget. If anyone is still wondering why GE is headed to Boston, no need to ponder that question any longer! So while the budget noise is crescendoing, the question is — how will the legislature solve the deficit and when? Simple answer first — it is safe to say that with a week to go in the regular legislative session and the Democrats unwillingness to meet with the governor, they will not get this done before they adjourn on May 4. That means a special legislative session sometime between adjournment and July 1 (the start of the new fiscal year). Now the most important question — how? In January, the governor and Democratic leadership agreed that there would not be any tax increases this year. Not a big surprise as it is an election year... But after the governor proposed deep cuts to social service programs, municipal aid, hospitals and state worker layoffs, Democratic leadership responded by going after his treasured transportation projects. It is so bad the speaker of the House [Brendan Sharkey (D) Hamden] called Malloy's proposed cuts "like his public enemies list rather than a plan for Connecticut’s future." The Democratic budget will likely include increased licensing and registration fees, online lottery and other creative revenue ideas to help fill budget hole. Increased registration and license fees would hit off of CEMA's members from our technicians, to our tucks and everything we have to pay for in between. Online lottery hits our c-stores in the wallet and with no prior public discussion of the issue it would be another example of a broken democratic process. The governor has vowed to veto any budget that gets to his desk that includes "tax increases," but once these proposals are on the table you never know what sticks when they are all finally required compromise. CEMA is working legislative leadership on these issues and to ensure the heating oil remains an untaxed product.