FAIRFIELD —State budget negotiators are back behind closed doors, considering last-minute changes after several iconic Connecticut employers criticized the proposed tax increases.
Earlier on Monday, General Electric Co. took the rare step of criticizing the state budget proposal, which boosts spending and taxes, and questions whether businesses and individuals should stay in Connecticut. The industrial conglomerate that posted revenue of $148.59 billion in 2014 said in a statement on its website Monday that the proposed tax increase is "truly discouraging."
The Fairfield-based company, which employs 5,700 in Connecticut and sits at #9 in the Fortune 500 list, says retroactively raising taxes makes businesses and residents "seriously consider whether it makes any sense" to stay. It says other states offer more opportunities and a better environment for business growth.
Here is the complete statement GE made on Monday:
"Reports that Connecticut officials intend to raise taxes by another $750 million dollars are truly discouraging. Retroactively raising taxes again on Connecticut’s residents, businesses and services makes businesses, including our own, and citizens seriously consider whether it makes any sense to continue to be located in this state. The Connecticut economy continues to struggle as other states offer more opportunities and a better environment for business growth. It is essential that Governor Malloy and legislative leaders find a more prudent and responsible path forward for Connecticut and its citizens in their current budget negotiations."
After other companies, such as Aetna Inc. and Travelers Companies Inc., joined GE in issuing statements against the $700 million in higher business taxes proposed in the budget, House Majority Leader Joe Aresimowicz confirmed "ongoing discussions" Monday night about possible changes to the two-year, $40 billion budget deal between the Democratic legislative leaders and Democratic Gov. Dan Malloy's administration.
Here is a statement from Aetna on the budget:
We were disappointed to learn that Connecticut legislators and the governor appear poised to significantly increase taxes on consumers and businesses, including approximately $700 million in business taxes over two years. We strongly believe this will undermine the competitiveness of Connecticut-based businesses and will lead to an exodus of jobs and business from the state.
Connecticut is in danger of damaging its economic future by failing to address its budget obligation in a responsible way. Such an action will result in Aetna looking to reconsider the viability of continuing major operations in the state.
Travelers Companies, which owns Travelers Insurance, also released a statement:
We are disappointed with the proposed tax increases in the budget agreement. Raising taxes again will increase the cost of living for nearly every resident and small business in the state, negatively impacting our employees and customers. Lawmakers should explore other solutions to the state’s budget to help keep Connecticut competitive and make it a desirable place to live and work.
Legislators had been scheduled to vote Monday on the $40 billion two-year proposal that includes tax increases for high net-worth individuals and certain business activities.
Business groups have criticized the budget as damaging Connecticut's ability to compete, and both GE and Aetna threatened to move their headquarters.
Governor Malloy responded to GE's statement earlier on Monday:
"Let's be very clear. Businesses, residents and the Connecticut economy lose billions – billions – of dollars of output each year because our transportation infrastructure needs a transformation, which this budget delivers. The historic investments we’re making in this budget, the largest in the history of Connecticut – an additional $10 billion – are good for job creation, good for the economy, and good for businesses, GE included. The bottom line is that the vast majority of households will see property tax relief as a result of the agreement. We've held the line to protect the middle class, while our wealthiest -- millionaires and multi-millionaires -- will pay their fair share, and it will all culminate in transformational improvements to our state.”