When Gov. Ned Lamont tweeted this summer that he hadn’t raised taxes, Republican gubernatorial nominee Bob Stefanowski immediately labeled his Democratic opponent “a liar.”
Lamont, who approved hundreds of millions of dollars in tax hikes in his first budget — and canceled hundreds of millions more in previously approved tax relief — quickly tried to clarify. In an article published in the Waterbury Republican-American, the governor said his campaign should have indicated he’d ordered no broad-based tax increases.
Though this wasn’t the first time Lamont had creatively rewritten his track record on taxes, Democrats bristled at Stefanowski taking umbrage.
The Madison Republican’s first gubernatorial campaign four years ago was centered on an astounding, unsubstantiated claim: He could eliminate the income tax that fuels nearly half of the entire state budget — even though it wouldn’t leave enough funds to meet all of Connecticut’s legal obligations.
And while Stefanowski no longer makes that pitch, he’s also never withdrawn that assertion.
“It’s now become a political legacy to stretch the truth,” especially when it comes to taxes, said House Minority Leader Vincent J. Candelora, R-North Branford, who added it’s a disservice to voters. “Many politicians stretch the truth because there isn’t follow-up and accountability to keep them honest.”
Former Gov. Dannel P. Malloy, a Democrat who served from 2011 through 2018, didn’t weigh in on the Stefanowski and Lamont claims. But Malloy, who had to counter — and who made — some bold tax promises in his 2010 and 2014 campaigns against Greenwich Republican Tom Foley, said sometimes “people vote in keeping with their desires.”
In other words, they may know a candidate is stretching the truth, but still accept it if it sounds good. “Every snake oil salesman is eventually found out,” Malloy added.
Lamont on Twitter: ‘First governor in 30 years to not raise taxes’
“4 years ago I promised not to raise taxes,” Lamont’s campaign tweeted on Aug. 22. “Here’s what happened next: First governor in 30 years to not raise taxes; $650 million tax cut for working families.”
That’s not the first time he’s made such statements.
In his first ad of this campaign, released in late March, Lamont said: “For years, politicians couldn’t get it done — balance the budget without raising taxes. As a businessman, I knew we could prove them wrong.”
In his February 2020 State of the State Address, Lamont said his first biennial budget, signed in June 2019, “showed we could live within our means and hold the line on taxes.”
How does Lamont reconcile all that with a 2019 budget that increased General Fund taxes and fees by $220 million the first year and $270 million the second? He helped create a 1% surcharge on prepared meals and a 10-cent fee on plastic bags, broadened what is subject to the 6.35% sales tax and reduced a tax credit for small and mid-sized businesses.
That 2019 budget also delayed or canceled roughly $650 million in tax cuts set to take effect after the 2018 election. Most of that suspended relief was headed to hospitals, but retired teachers, property taxpayers without dependents and college graduates with degrees in science, technology, engineering or math also came up short.
Lamont doesn’t count those as tax hikes. Many Republicans do.
“There is no polite way to say this,” Stefanowski said immediately after the Aug. 22 tweet, “but Ned Lamont is a liar.”
When pressed on details, Lamont routinely clarifies there were no broad-based tax hikes in his budget, or that he didn’t increase the income tax. By far the state’s single-largest source of revenue, the income tax looms larger than others for fiscal and psychological reasons, the governor told the CT Mirror last week.
“I think it changed the dynamic of how people think about the state of Connecticut,” he said of his track record of keeping the income tax stable. During the last two fiscal years, Lamont has blocked efforts by progressives to create a corporation tax surcharge or make other income tax changes that would increase burdens on Connecticut’s wealthiest households.
The governor, a wealthy businessman from Greenwich, has said repeatedly he believes bolstering tax rates on Connecticut’s richest taxpayers would prompt them to flee the state.
“The most important thing is give people some tax certainty,” he added.
But Republicans say Lamont’s comments are callous.
“People that have extreme wealth, like our governor, don’t need to pay attention to consumption taxes,” Candelora said. “Our blue-collar districts … have felt every single tax increase.”
“He’s the master of half-truths,” Stefanowski added. “I don’t think Gov. Lamont has a sensitivity to what people are going through.”
Stefanowski’s pledge to repeal CT income tax haunts his campaign
But when it comes to being forthright about taxes, Democrats say, Stefanowski should be the last one to talk.
His claim to eliminate the income tax was the overwhelming centerpiece of a 2018 campaign, but he never explained how he would achieve it.
The income tax generates roughly half of the revenue that supports the General Fund, which covers the bulk of the state’s annual operating costs. This fiscal year, it’s projected to generate $11.7 billion or 53%.
Debt payments, Medicaid and other fixed costs alone are slightly more than half of the budget, according to nonpartisan fiscal analysts. And that doesn’t include salaries — roughly 30% — which largely are fixed by contract but can be adjusted somewhat via union concessions or layoffs.
When pressed for details during his first campaign, Stefanowski only said he could phase out the tax over eight years.
But many of Connecticut’s fiscal challenges will need longer than that. Tens of billions of dollars of pension and retirement health care debt are projected to place significant stress on state finances well into the 2030s or 2040s.
Stefanowski repeated that unsubstantiated promise like a mantra four years ago.
“He had a very un-nuanced presentation. Everything was about cutting taxes,” Senate President Pro Tem Martin M. Looney, D-New Haven, said of Stefanowski’s 2018 proposal. “What should you do if your ‘check engine’ light comes on? Cut taxes. What should you do if you have a toothache? Cut taxes.”
Puya Gerami, campaign manager of Recovery for All CT, said “It’s laughable that Stefanowski is claiming to be the arbiter of truth on tax policy. This is the same person who advocated for eliminating the income tax with a straight face — refusing to say how such a heartless act would gut public services and devastate the quality of life for all our communities, especially communities of color.”
Stefanowski says Democrats need to move on from 2018.
“If they want to run a campaign from four years ago, I’m fine with that,” he said. “We’ve got a much broader platform this time. It’s achievable. … Gov. Lamont doesn’t want to talk about his track record.”
This time around, Stefanowski has praised House and Senate Republicans for pitching a middle class income tax cut. Rather than wiping out $11.7 billion in state income tax receipts, this would cost the state a far more manageable $387 million per year.
Stefanowski also opposed a 9-cents-per-gallon bump in the diesel fuel tax that Lamont and the legislature allowed to take effect on July 1 — at the same time the national inflation rate had reached a 40-year high. This tax hike could be have been suspended at a cost of roughly $20 million per year, based on annual diesel tax receipts.
But not all of Stefanowski’s questionable claims are in the past.
Lamont had promised to bolster the income tax credit that offsets municipal property tax burdens from $200 to $700 for many households — and to do it within his first two years in office.
He didn’t propose anything until his fourth year, when he signed a budget that boosted the credit to $300.
But the new Stefanowski ad not only accuses Lamont of breaking his promise, it quickly adds, “and property taxes increased over $500 a year, an increase cruelly hitting working families and seniors.”
The ad doesn’t explain that Lamont’s promise involved state income tax relief, while property tax rates are set at the municipal level.
It also doesn’t mention that Lamont and the legislature increased both education and non-education grants to cities and towns during his first term.
Jake Lewis, Lamont’s campaign spokesman, said the property tax credit expansion the governor did approve this year was part of a much larger, $660 million tax relief plan that is one of the largest in state history. It also included a $250-per-child income tax rebate and special payments of federal pandemic relief to working poor families, and it lowered the statewide cap on motor vehicle taxes from 45 mills to 32.46 mills.
“Gov. Lamont has kept his promise to lower taxes, balance the budget and support our cities and towns,” Lewis said. “His responsible leadership is in stark contrast to Bob’s extreme economic plans that would obliterate funding for essential programs like education and throw us back to the chaotic days of debts and rollercoaster budgeting.”
Stefanowski and other Republicans counter that Lamont handed back a few crumbs when he could have done so much more. The $660 million relief plan is modest considering the national inflation rate topped 9% earlier this summer. It’s also a fraction of the $4.3 billion surplus the state achieved last fiscal year, or of its $3.3 billion emergency budget reserve.
Political rhetoric on taxes may have a silver lining
Still, not everyone frustrated by the political rhetoric on taxes sees it as all bad.
Gerami, whose progressive coalition comprises labor, faith and other community-based organizations, said the fact-checking tax debate could have a silver lining if it leads voters to demand “an honest conversation” on wealth inequality and tax reform — something neither candidate has addressed.
“Let’s talk about how our current structure protects the wealth of millionaires and billionaires over the lives of children across Connecticut,” Gerami added.
Carol Platt Liebau, president of the Yankee Institute for Public Policy, a conservative fiscal think-tank, also thinks something good can come out of the gubernatorial candidates’ messaging.
“Gov. Lamont and Bob Stefanowski’s recent remarks are encouraging,” she said. “Clearly, both see tax cuts as an important part of revitalizing Connecticut’s economy.”
With one of the highest combined state and municipal tax burdens in the nation, Connecticut’s job market would benefit from a battle to see who could lower taxes more, she said.
“Our state’s ultimate goal should be to establish a broad-base, low-rate tax regime that will allow us to effectively compete to attract new businesses and people,” Liebau added. “Let’s hope both candidates lay out plans to do just that.”