The Republican Leaders said the Democratic tax and spending plan – which includes more than a $154 million in new spending, a new sales tax on delivery charges and a new Homestead Exemption – will further endanger Connecticut’s economy and alienate businesses.

“Democratic leaders have, without apology or explanation, abandoned the promises they made to taxpayers and businesses just two short months ago and are now proposing significant tax increases,” said Senate Minority Leader John McKinney (R-Fairfield). “This is a striking reversal and one that could have a devastating effect on our economy.”

Of particular concern to Senate Republican Leaders is a new “Delivery Services Tax” which would, for the first time, apply a 6% tax to the delivery charges of all goods transported in Connecticut including documents, products and groceries.

“The Democrats’ ‘Delivery Services Tax’ is nothing more than an elaborate scheme to pay for undisciplined spending proposals. If it is approved as advertised it will put Connecticut businesses at a disadvantage and negatively impact residents of all ages and income levels,” said Senate Minority Leader Pro Tempore Len Fasano (R-North Haven). “Businesses will be hit first and hardest by this new tax burden, and they will move quickly to pass this cost on to consumers. No one will be immune from paying new premiums for the delivery of medicine, groceries and other goods.”

Senate Republican Leaders said a new Homestead Exemption will result in additional tax increases on Connecticut businesses by shifting the municipal tax burden to non-residential taxpayers.

“Imposing new taxes on Connecticut businesses, especially at a time when a record number are closing their doors, is terrible public policy,” said Senator McKinney. “This legislature should be working with Connecticut businesses to help create and keep jobs in our state. Repealing the Business Entity Tax and expanding the Job Creation Tax Credit are two ways we can help.”

Earlier this year, Senate Republicans introduced a comprehensive jobs growth initiative that called for: expanding the job creation tax credit; repealing the business entity tax; eliminating outdated, redundant and counterproductive business regulations; and providing tax incentives to emerging and next generation industries like alternative fuel, environmental remediation and nanotechnology – industries likely to provide good paying jobs to Connecticut workers at all levels of skill, experience and education.

None of the Republican proposals were included in the Democrats tax and spending proposal.

Under existing law passed in 2007, the Job Creation Tax Credit is available to Connecticut C-corporations that create 10 or more net new jobs in a year. Qualifying businesses approved by the Department of Community and Economic Development (DECD) receive a tax credit equal to 60% of each new worker’s state withholding tax. Republicans have proposed extending the benefit to all businesses and applying the credit annually for every net new job created.

Republicans have been working to abolish the $250 annual Business Entity Tax since its inception in 2002, most recently as part of the 2007 No Tax Increase Budget Proposal. A Republican amendment that included the elimination of the business entity tax failed last year on a 12-24 party-line vote in the Senate. A similar amendment failed in the House.