Sales tax plan splits local delegation [Monroe Courier]

February 23, 2015

Article as it Appeared in the Monroe Courier
Monroe’s legislators are mostly unconvinced about a proposal by Gov. Dannel Malloy to reduce the state income tax from 6.35% to 5.95% over two years. Malloy’s plan also includes eliminating some sales tax exemptions.

“While a reduction in the sales tax is welcome news, the governor plans to offset this by increasing other tax burdens on families,” said Sen. Kevin Kelly (R-21st). “Not all the details are out yet, but we do know part of the governor’s proposal includes breaking a campaign promise and taxing clothing costing less than $50. In the end, the state will actually collect more money from taxpayers over the next year.”

Malloy was expected to deliver his full budget proposal to a joint session of the General Assembly Wednesday, but released several details of the plan ahead of his budget address, including the sales tax reduction and elimination of exemptions.

In a statement, Malloy said the sales tax will be reduced in two phases: from the current rate of 6.35% to 6.2% on Nov. 1, 2015, and then down again to 5.95% on April 1, 2017. Eliminating minor exemptions will allow the entire sales tax to drop for almost all items, saving residents money on almost all purchases.

The proposal would eliminate the exemption from the sales tax for clothing — which was scheduled to begin on July 1 — however, during the annual “Sales Tax Free Week” in August, no sales tax would be owed for clothing costing less than $100.

The governor’s office says the lower sales tax rates will save consumers $70 million in Fiscal Year 2016, $155 million in 2017, $300 million in 2018, $311 million in 2019, and $323 million in 2020.

“My goal is to support, stand with, and expand Connecticut’s middle class,” Malloy said in the press release. “By reforming our tax system, we’ll be able to lower the cost of almost all items — for everyone. Our economy continues to improve, and the state is seeing the largest private-sector job growth since 1998. By streamlining and simplifying our sales tax structure, we can give working families the lowest sales tax level in four decades.”

State Sen. Marilyn Moore (D-22nd) said the sales tax reduction was “generally a step in the right direction that will give some relief to the middle class.”

Moore said she hoped to see the sales tax exemption for clothing under $100 also be implemented in the future.

“This relief will have a profound impact on low to moderate income earners,” she said.

State Rep. J.P. Sredzinski (R-112th) was taking a wait-and-see approach in the days before Malloy’s official budget unveiling.

“We have seen him change his mind previously — like his $50 tax refund gimmick that never materialized last year,” Sredzinski said.

But Sredzinski added that Malloy’s plan, as described by the governor, “doesn’t seem to provide any relief to the middle class at all.”

He said he would support a reduction in the sales tax if it were “a true reduction without any conditions.”

Currently, the sales tax is 6.35%. It was 6% from 1991 to 2011, between 7 and 8% from 1976 to 1991, and 6% in 1975.