Gov. Malloy defends tax increases in budget deal

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Gov. Dannel Malloy defended a new round of tax increases Thursday, which were included in the state budget passed just minutes before the midnight deadline of this year's legislative session.

The Senate passed the budget by a thin margin of 19-17 after six hours of debate.

Republican leaders say the budget will drive business out of the state while the Democratic majority says there will finally be tax relief for the middle class.

Automobile owners may see a modest break on car taxes, but many other taxes are going up in the new budget.

Drivers in Bridgeport pay some of the highest car taxes in Connecticut. Resident Arnold Charles Jr. pays about $125 a year. Under the new state budget, he'll pay about $50 less.

Taxes on cigarettes, clothes and luxury items are all slated to increase, as will income taxes for many state residents, according to the new budget.

The governor dismissed criticism that he broke a campaign promise of no new tax increases. Malloy says he sent lawmakers a budget that kept taxes steady, but legislative leaders refused to pass it.

"We worked together to the best of our ability," Gov. Malloy said. "Republicans had their budget. Democrats had their idea about their budget. Nobody gets everything they wanted." 

The budget did end up raising taxes on corporations despite powerful companies like Fairfield-based General Electric who threatened to leave the state. Republicans say they had hoped to save money by securing concessions from labor unions.

Cynthia Michener, a spokeswoman for Aetna, said the budget marked a failure by politicians at the expense of businesses and residents.

"Once this new budget is fully implemented, our tax burden increases by approximately 27 percent annually," Michener said. "Taxes like the tripling of the computer and data processing tax hurt our ability to remain competitive and invest in our employees and customers."

Lawmakers also battled over a controversial measure already approved by the House that hikes taxes on cigarettes, up to 50 cents a pack.

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