- Associated Press - Thursday, November 5, 2015

HARTFORD, Conn. (AP) - Democratic House Speaker Brendan Sharkey acknowledged Thursday that Connecticut lawmakers made mistakes when they tried to balance the state’s new two-year budget, not fully understanding the impact of various tax changes on businesses.

Speaking to the new State Panel on Business Competitiveness, Sharkey said legislators came up with revenue-generating ideas that were “not fully vetted,” such as increasing the state’s tax on data processing.

“I’m acknowledging that publicly because it became evident to us, shortly after it was done, when we heard from the corporate community as to what the impact would actually be if we were to raise that tax,” he said. “And, it was a bad idea.”

In June, General Electric Co., Aetna Inc., the Travelers Companies Inc. and Boehringer Ingelheim issued public statements criticizing tax changes included in the $40 billion two-year budget, with GE and Aetna saying they were considering moving operations out of Connecticut. GE informed its employees it had formed a company task force to explore its options.

The General Assembly later passed a revised budget that scaled back some of the business-related tax increases. Lawmakers also passed legislation creating the state business panel, a permanent body of experts that will advise legislators on bills that might impact the business community and the state’s economic competitiveness. The group is also charged with helping to change the perception that Connecticut is unfriendly to business, Sharkey said.

“I recognized, after we finished this budget, that we had made mistakes and I’ve seen it over the years since I’ve been here. We’ve done this before. That process is not perfect and it sometimes leads to those kinds of bad decisions that are unintended,” said Sharkey, who had worked hard in early June to narrowly pass the first budget through the legislature.

Sharkey asked the panel to advise lawmakers over the coming weeks as both Democrats and Republicans meet with Democratic Gov. Dannel P. Malloy to determine how to close a budget shortfall that developed in this fiscal year’s budget. Lawmakers agreed Wednesday the deficit is about $350 million to $370 million, after scrapping about $103 million in proposed cuts Malloy made to hospitals and social service programs.

Sharkey said a special legislative session on the budget could be held sometime in December. The next regular legislative session doesn’t begin until February.

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