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Committee Advances Tax Package

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Connecticut State Capitol (WTIC's Michael Guerrera)

Connecticut State Capitol (WTIC’s Michael Guerrera)

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By SUSAN HAIGH   Associated Press

 
HARTFORD, Conn. (AP) _ Gov. Dannel P. Malloy’s proposed $55-per-person tax refund cleared a key hurdle Tuesday, passing the General Assembly’s tax-writing committee with mostly Democratic support.

The concept will now be discussed as part of the final budget negotiations between legislative leaders and Malloy. They have until May 7 to reach an agreement on a revised tax and spending plan for the fiscal year that takes effect on July 1.
While acknowledging the refund is modest, the Democratic leaders of the Finance Revenue and Bonding Committee said the proposed refund program recognizes Connecticut taxpayers have weathered the state’s fiscal difficulties over the years, including paying higher taxes to help cover budget deficits.
“When there’s an opportunity to give back a little money, I think it’s a tribute to the people who have withstood hard times with us,” said Rep. Patricia Widlitz, D-Guilford, the committee’s co-chairman.

But Republican members said many of their constituents have chuckled about the sum, saying the money is better spent paying down state debt or saved in the state’s rainy day fund.
“Honestly, people are laughing about this. They don’t take it seriously at all,” said Sen. Toni Boucher, R-Wilton. “They see it as an election year giveaway.”
Rep. Vincent Candelora, R-North Branford, said he has received a similar reaction.
“A lot of residents have come to me in my district and said, `What am I going to do with $55? Just keep the money and pay down debt,”’ he said.

Under Malloy’s proposal, $155 million of this year’s projected budget surplus of more than $500 million would be set aside for the refunds, which would be mailed out in September. The checks would be $55 for individuals earning less than $200,000 and $110 to joint filers earning less than $400,000. It’s estimated it will cost the state about $1.72 million to issue the checks.

The bill was approved Tuesday on a 31-19 vote, with Rep. Edward Moukawsher, D-Groton, the sole Democrat to join the Republicans in opposition.
Moukawsher said the state faces a $1 billion deficit in fiscal year 2016 and lawmakers “need to be prudent” about what they do with the projected budget surplus.
Sen. John Fonfara, D-Hartford, the committee’s other co-chairman, contends that under Malloy’s leadership the state is rebuilding its budget reserves and retiring long-term debt. He said Malloy now believes “those who have sacrificed should share in the benefit” of an improving economy.
“We feel strongly that we ought to support that,” Fonfara said. “If nothing else, in appreciating that we have a surplus for the first time (in recent years) and taxpayers should see a piece of that in their pocketbooks so they can use it as they see fit.”

The bill approved Tuesday also restores the sales tax exemption on non-prescription drugs and begins a phase-in of exempting a portion of teachers’ pensions from the personal income tax.

(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

 

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