GREENWICH -- Gov. Dannel P. Malloy came to this wealthy town Monday night to defend his budget that increases the state income tax on Connecticut's richest residents, increases the tax burden on Greenwich Hospital by $10 million, and proposes to create a new luxury tax on high-end cars, yachts, and jewelry.
"He's going into the mouth of the lion,'' said Greenwich First Selectman Peter Tesei as he introduced Malloy.
Malloy handled a series of questions on taxes and health care, particularly on the proposed tax increase on all state hospitals that would particularly affect Greenwich Hospital.
"There's a lot of this budget that I truly hate and will vote against it,'' state Rep. Fred Camillo said. "But you have shown great leadership'' by holding 11 town hall meetings across the state so far on a scheduled list of 17 meetings.
"We refused to balance the budget on the backs of taxpayers by slashing municipal aid,'' Malloy said. "The safety net remains intact.''
When Malloy mentioned recently to a crowd in Hartford that the safety net would remain intact, the attendees burst into applause. In Greenwich, the same statement was met with silence from many residents who are not concerned on a daily basis with the safety net.
Malloy mentioned that the median income in Greenwich is $126,000, and that the increase in the state income tax on a daily basis would be a relatively small number. The crowd laughed.
"Yes, we will enforce the spending cap,'' Malloy said when a woman asked about state spending.
After the questioner mentioned corporate taxes, the crowd murmured again when Malloy said that one study showed that Connecticut was the 5th best in the nation concerning corporate taxes.
"What about Pfizer!'' a man yelled from the back of the auditorium.
Republican John Raben, a former Democrat who previously served on the town's finance board, received applause when he said, "Many people believe we don't have a revenue problem. We have a spending problem.''
Raben asked Malloy why he is proposing more taxes when New York and New Jersey's governors are not proposing large tax increases.
"I've taken a different path. I understand that,'' Malloy said. "I think Connecticut has been badly run for a long period of time.''
Malloy again criticized the deal by former Republican Gov. John G. Rowland for a 20-year deal with state employees on health care and pensions that does not expire until 2017.
"If you take Fairfield County out and you take the two casinos out, this state is in a jobs depression,'' Malloy said. "You don't have to be an enemy of government to make government work.''
An employee of a high-end automobile dealer questioned Malloy's proposal to add an additional 3 percent on the portion of the sale above $50,000. The amount below $50,000 would be taxed at 6.35 percent if Malloy's proposed tax increase is approved by the legislature.
"$50,000 - that's a middle-class family buying a Tahoe to bring their kids to soccer,'' he said.
"I hear you, but I don't think you're going to see a lot of people going to Westchester County to buy that car,'' Malloy responded.
Concerning the highly controversial issue of healthcare pooling, Malloy said he was not against the concept of pooling that would allow cities and towns to join the state employees' insurance pool. The Democratic-controlled legislature passed the pooling concept, which is strongly supported by House Speaker Christopher Donovan, in the past, but pooling was vetoed by Republican Gov. M. Jodi Rell. The legislature was unable to override Rell's veto.
Among the first eight speakers, many of the questions concerned health care and the proposed hospital tax. A Greenwich Hospital board member said that the hospital tax alone would move the hospital from a positive financial position into the red in a single year if the hospital loses $10 million as proposed.
"The tax, in and of itself, doesn't do what you say it will do. It's the distribution of the proceeds,'' Malloy responded. "We're looking for additional federal dollars. ... I understand the Greenwich problem. ... We're aware of it.''
The crowd began arriving early at the Eastern Middle School in the Riverside section of Greenwich on Monday night in advance of Malloy's town hall meeting.
The crowd was entertained by a white-haired woman who was playing the piano at the front of the 581-seat auditorium and playing patriotic songs like "America The Beautiful.''
Plainclothes state troopers and a representative from the Greenwich fire marshal's office were checking the last-minute logistics as the crowd started to file in.
Starting in Bridgeport, Malloy has been criss-crossing the state and visiting communities both rich and poor.
In Greenwich, two of the hottest issues are the proposed increase in the state income tax and the creation of a new "luxury tax'' on cars sold for more than $50,000, as well as yachts over $100,000 and jewelry over $5,000.
Malloy's opponent in the Democratic primary, Ned Lamont, was sitting in a reserved seat, in the front row, on the aisle, with his name written on it. He is seated next to his Harvard-educated daughter, Emily. Other top Greenwich officials have reserved seats, including state. Sen. L. Scott Frantz of Riverside.
Lamont took a more pro-business stance during his primary battle last summer against Malloy, who received large support from the state employee unions.
"I think a lot of folks here want some more spending cuts,'' Lamont said before Malloy arrived. "I think, over time, there's going to have to be more efficiencies.''
Republican Peter Tesei, Greenwich's first selectman, said that one of the biggest issues in town is the proposed hospital tax, which is a complicated levy that would eventually be costly to Greenwich Hospital. Money from the hospital tax is collected in a pool, and some hospitals in the state that handle many indigent patients are not harmed by the tax because they receive reimbursements. Greenwich Hospital, however, is known as a loser on the winners and losers list.
Tesei said that Greenwich residents want Malloy to control spending and "follow what New York's governor has done.''
Dr. Dickerman Hollister of Greenwich Hospital was the first person on the list to ask a question - reflecting the level of concern about the hospital tax in town. He said that the tax would cost Greenwich Hospital $10 million per year and it would be "disproportionate'' as the largest loss for any hospital in the state.
The crowd booed when Malloy said that he would trade an $11 million deficit for a $3.5 billion deficit any day.
"You can say what you want,'' Malloy responded as the crowd booed.
Julia Chiappetta noted that Greenwich residents pay more in state income taxes than any other of the 169 cities and towns.
"What's my incentive to live here? Why not move to Florida?'' Chiappetta said as the crowd laughed.
"Because I think Greenwich is a lot nicer than Florida,'' Malloy said. "I think Greenwich is a great place to live. I think you do, too.''
Malloy responded that he is criticized in many cities around the state because he is not taxing Greenwich residents even more. Then he comes to Greenwich, and they complain that they're being taxed too much.
"I can't complain. I ran for this office. I ran really hard for this office,'' Malloy said.