No new taxes. That’s what a press release from Gov. Dannell Malloy’s office said about the two-year $44-billion state budget passed this week in Hartford.

Not so fast. That was the reaction of Sen. Toni Boucher (R-26) who cast one of 17 votes against the budget in the Senate on Monday, June 3. The measure narrowly passed, 19-17. Nineteen votes were needed for adoption. In the House, state Rep. Gail Lavielle (R-143) also voted “no,” and state Rep. Thomas O’Dea (R-125) did not vote.

According to Ms. Boucher, the budget contains more than $300 million in new taxes. “Specifically, there is an increase in the gas tax from 7% to 8.1% on July 1, 2013,” she said.

“That’s significant,” she added, since most people drive cars and will be affected. Ms. Boucher spoke with The Bulletin on Tuesday about her opposition to the budget.

In addition to the taxes, Ms. Boucher said there are fee increases, many of which fall under the Department of Motor Vehicles. “DMV fees are going up to $72,” she said. Also going up are transportation fees, “the cost to take driver training, all sorts of things are going up.

“What really annoys me is the transfer of $100 million from the Special Transportation Fund,” Ms. Boucher said. That has been a sore spot with Wilton legislators. Both Ms. Boucher and Ms. Lavielle have proposed legislation to lock up money in the Special Transportation Fund. The “lockbox” proposal has passed in the omnibus transportation bill, but will not go into effect until 2015.

In addition to the transportation fund, money was also taken from the Banking Fund, the Tobacco Fund, the Probate Court Fund, and the Connecticut Energy Fund.

A close vote

Ms. Boucher said she was not surprised the Senate vote was so close. The margin was much larger in the House where it passed 95-48; 72 votes were needed for adoption.

She attributed the narrow victory to the fact state senators are responsible for much larger districts than state representatives. A typical state Senate district encompasses about 110,000 people, compared to a House district with 25,000 or so constituents. That results in a senator having to take into consideration a broader reach of sentiments than might be found in individual towns or cities.

“It was very close,” she acknowledged. “We were just one vote shy of it being a tie vote. The issue of the spending cap is huge for some,” she said.

The spending cap was instituted in the early 90s as part of the adoption of a state income tax. Its purpose is to limit how much state spending can expand from one year to the next. “This budget changes what is considered under the cap,” she said, and thus exceeds it.

Specifically, Ms. Lavielle said, it takes $6.3 billion in Medicaid spending “off-budget,” although it will still be spent.

“This is a feasible budget only if you believe in miracles,” Ms. Lavielle said. “Medicaid spending has always counted toward our spending cap. Now suddenly, although the state is still spending the money, it has disappeared from the equation as if by magic, just because it is now called something else. Building a budget on semantics instead of financial realities is seriously flawed policy and disrespectful to taxpayers.”

Mr. O’Dea also opposed the spending cap manipulation, but because of a “longstanding family obligation” he was unable to cast a vote early Sunday morning.

“We need to live within the limits of this Constitutional cap, as approved by more than 80% of voters at the polls, back in 1991,” he said. “This budget renders the cap meaningless and redefines the will of the people.”

“Connecticut is a land of broken promises,” Ms. Boucher said. “The income tax, spending cap, real estate tax, corporation tax, energy tax were all temporary taxes that were to have been sun-setted and removed from the books. No wonder some here refuse to vote for any new temporary tax, no matter how compelling the argument; no wonder the public does not trust its state government. This budget proposal enacted by the majority party is a disappointment and builds on Connecticut’s reputation as a business- and taxpayer-unfriendly state.”

The budget also extends a 20% corporate surcharge tax that businesses were told would expire, which, Mr. O’Dea said, “perpetuates our unstable business climate, prevents job creators from hiring and discourages businesses from coming to Connecticut.”

He said he plans a business tour this summer in the 125th District to hear concerns from small business owners about how Connecticut can foster a better relationship with the business community.

Disagreements

Mr. Malloy said the budget “honors our past obligations by finally funding our pension system, saving Connecticut’s residents billions of dollars down the road.”

Ms. Boucher said the pension system  — “one of the real negatives” of the state’s financial situation, particularly with financial ratings agencies — has been less than 50% funded. “It needs to be 80% to 85% funded. They may be making a move towards it, but they are nowhere close,” she said.

Retired teachers have taken a hit with this budget, she added. The state had been making a contribution to their health care premiums. “They stopped funding it with this budget,” Ms. Boucher said. “They give with one hand and take away with the other.”

The governor also claims the budget is fully balanced under Generally Accepted Accounting Principles (GAAP).

“I give him great credit for trying to do GAAP accounting … but he’s not able to accomplish that,” Ms. Boucher said.

She added the budget continues the practice of borrowing for operating expenses. “It’s very disheartening,” she said.

“While the complete disregard of the spending cap is unacceptable,” Ms. Lavielle said, “the lack of firm policy initiatives designed to restore the state’s financial health and reinvigorate the economy is even worse. A constituent asked me what this budget does to attract businesses to the state, reduce structural spending and taxes, lower unemployment, or help the middle class. Unfortunately, it does none of these things. Instead, it keeps Connecticut on the same trajectory that has led it toward the bottom of so many national financial and economic rankings.”