Quick quiz: Which governor approved the two largest tax hikes in modern Connecticut history? If you answered Dannel P. Malloy you would be in elite company.
You also would be wrong — by any measure.
A state panel recommended a dramatic shift in state tax burdens Thursday from wealthy income taxpayers onto businesses and consumers as part of a sweeping plan to stabilize government finances and jump-start the economy.
A recent analysis by The Pew Charitable Trusts shows Connecticut has been lagging the nation in personal income growth since the last recession. And most recently that meager growth has been slowing down.
State income tax receipts are projected to surge by $900 million in a report due next week. But because of new spending controls in the state budget, legislators can’t use the bulk of that to mitigate a $224 million deficit.
Increasing taxes on the wealthy — a solution in several state budget crises — seemed off the table this year. But the discussion may not be over yet, despite Gov. Dannel P. Malloy’s strong opposition.
DANBURY — As he explores a third campaign for governor, Republican Mayor Mark Boughton is testing a message not seriously proffered in two decades: a call for elimination of the state’s tax on wages. He says it’s not a stunt, but voters will have to wait to hear how he thinks Connecticut could get by without nearly half its revenue.
Gov. Dannel P. Malloy has recommended more than $700 million in cuts to municipal aid to help compensate for a $1.5 billion projected decline in state income tax receipts over the next two years.
John A. Elsesser, longtime Coventry town manager, has been one of the leading figures in municipal government for nearly four decades. He understands the varied and intensifying fiscal pressures facing Connecticut and its municipalities, recognizes the need to raise revenue; and sees one possible way to do it fairly — a commercial activities tax.
Updated at 6:10 p.m.
Gov. Dannel P. Malloy asked legislative leaders Wednesday to meet with him next week to plan a bipartisan response to state income tax receipts declining by “hundreds of millions of dollars.”
Connecticut is not alone in its budget woes, but it does have less margin for error in dealing with them than other states, according to new reports from two nationally recognized policy think-tanks.
Leaders of the legislature’s Black and Puerto Rican Caucus said they are exploring raising income tax rates on wealthy households — a once popular proposal among House and Senate Democrats that has fallen into disfavor as Republicans have gained seats in both chambers.
House and Senate Democrats called Thursday to exempt all Social Security from the state income tax, a move that could save seniors $45 million per year.
Gov. Dannel P. Malloy said Friday his proposed budget would shift $400 million, nearly one-third of the cost of municipal school teachers’ pensions, onto cities and towns next fiscal year — a move that would hit the state’s wealthiest communities the hardest.
The projected deficit in the next two-year state budget has swelled by more than $500 million because of declining revenue projections, state fiscal analysts reported Thursday.
Although Connecticut’s tax system certainly needs reform, the income tax is not at the center of its problems. Most of our revenue woes come from system full of loopholes, unnecessary tax expenditures and giveaways. Fixing Connecticut’s tax code to make it more fair, transparent and predictable would do far more to promote growth and fix our budget crisis than any income tax cuts for the powerful.
