Fasano questions Malloy tax-cut plan [New Haven Register]

February 18, 2015

Article as it appeared in the New Haven Register

HARTFORD >> State Sen. Len Fasano, R-North Haven, Senate minority leader, has issued a criticism of Gov. Dannel P. Malloy’s proposed cut in the sales tax if it means other tax cuts scheduled for fiscal 2016 are not put into effect.

Malloy, in an appearance on “Face the State” on Sunday, said he will propose reducing the sales tax from 6.35 percent to 6.2 percent on Nov. 1 and to 5.95 percent in April 2017.

It would be the first drop under 6 percent since 1971 when former Republican Gov. Thomas Meskill brought it above 6 percent.

The changes would reduce revenues by some $70 million in fiscal 2016 and by $155 million in fiscal 2017.

The sales and use tax is expected to bring in $4.2 billion in revenues this year and is second only to the income tax in the money it generates to support the $19 billion state budget through June 30.

“A reduction in the sales tax is good news for Connecticut families. I applaud efforts to reduce the sales tax, but I also have a lot of questions for the governor. If the governor simultaneously ends other exemptions and eliminates the scheduled phase-out of other taxes on things like clothing under $50, taxpayers could see more taxes in the end. Reducing one tax while reintroducing another could mean larger burdens on families across the state. I hope that this is not the case,” Fasano said in a statement.

Reinstating the exemption for clothing costing under $50 is scheduled to go into effect on July 1.

Mark Bergmam, spokesman for Malloy, said a tax exemption on clothing only helps with that specific purchase.

He said an overall cut in the rate applies to all goods and helps more people. “We are looking at this as a tax reform,” Bergman said. “It’s more fair and equitable.”

Bergman said Fasano has not presented any serious budget ideas, but would rather continue to engage in “partisan sniping.”

“Connecticut needs a responsible budget from the governor, as well as comprehensive tax relief. Until we see a detailed plan it’s hard to measure the true impact of the governor’s announcement today,” Fasano said.

Malloy is scheduled to present his biennium budget to lawmakers on Wednesday.

There are a number of tax cuts scheduled to go into effect in the next year, besides the clothing exemption, that could be changed with the proposed new budget, given the tough financial situation the state is facing with a projected $1.3 billion deficit in 2016 and $1.4 billion in 2017.