Capitol Connection: A Budget Built on Broken Promises

February 20, 2015

Budgets should never be balanced on broken promises. Sadly, that is exactly what the governor has done.

This week Governor Malloy unveiled his two year budget proposal totaling almost $40 billion. This budget burdens taxpayers with over $915 million worth of new tax increases, and eliminates essential tax exemptions Connecticut families and businesses were counting on.

Most offensive is the plan to eliminate a scheduled tax exemption on clothing under $50. This exemption would make essentials like children’s clothing more affordable for Connecticut families, especially those most in need. While the governor eliminated this tax exemption years ago, he proudly campaigned on the fact that he would restore the tax break this year. But now this promise is out the window. In addition, the governor also wants to lower the threshold for the sales tax free week from $300 to $100, meaning much less will be eligible for that special back-to-school savings many families rely on.
Instead of giving us a break on clothing essentials, the governor is focusing on a small cut to the overall sales tax. In my opinion, any tax cut is welcome news. But in this case, it feels more like a bait and switch.

The Governor says that middle-class families will save more money by having a lower sales tax rate than what they would have saved via the clothing exemption. But this is not true for most middle class families. For example, if a family had purchased $250 worth of tax exempt clothes in a year, they would have saved $15.87 in sales tax under the clothing tax exemption. In order to save that much under the governor’s proposed 6.2% sales tax, the same family would have to spend $10,600 on taxable items!

The budget also breaks promises made to Connecticut employers. It cements a 20% corporate surcharge tax indefinitely, even though the tax was only supposed to be temporary. It increases restrictions on tax credits that businesses can claim. Combined, these actions make the business environment in CT even more unsteady. How can employers plan for job growth when the rules are constantly changing? How will employers be motivated to invest in our state when the incentives are being pulled out from under them?

The president of the Connecticut Business & Industry Association, Joseph Brennan, commented on this proposal saying, “I think it strikes a blow at business confidence…strikes a blow at our recovery.”

Business confidence moves us closer to recovery. Recovery enables job growth. Job growth enhances opportunity and quality of life for all families. Sadly, the governor’s budget does not realize this progression.

I will say there are some good ideas in the governor’s budget and I look forward to exploring these with fellow legislators, but it’s hard to support the governor’s plan when so many promises have been broken and so many costs are being pushed onto the middle class, working people and job creators. The state’s finances are in trouble, which is why it is even more important to hold up the promises people are relying on.

A delayed promise is a broken promise. Connecticut needs relief today, not tomorrow.