Connecticut tax relief: GOP sales-tax plan has merit [Rep-Am Editorial]

January 10, 2022

Waterbury Republican-American Editorial

Connecticut Senate Republicans last week unveiled a proposal that would temporarily reduce the state’s sales tax.

It is worthy of enactment, and news reports indicate bipartisan support is a possibility.

Unlike Democratic Gov. Ned Lamont’s tax-rebate plan, the Senate GOP’s sales-tax design would benefit all Connecticut residents.

The sales tax has been a presence in Connecticut since 1947. Its current rate is 6.35%. In fiscal year 2021-22 (July 1, 2021-June 30, 2022), the tax “is projected to generate more than $4.4 billion,” the Connecticut Mirror reported Jan. 4. The sales tax is the second-largest revenue generator for the state, after the income tax, which is expected to raise nearly $10.4 billion, according to the Mirror’s Keith M. Phaneuf.

With that in mind, Senate Minority Leader Kevin C. Kelly, R-Stratford, and his caucus have proposed reducing the sales-tax rate to 5.99%, as well as suspending the nearly three-year-old 1% surcharge on prepared meals. Fox CT reported Jan. 4 that the plan would be in effect from Feb. 15 through the end of calendar year 2022. “The family budgets are getting crushed,” said Sen. Kelly. “What we’re hearing from families across Connecticut is that they need help, they need relief, that the economy for Connecticut is not performing for them.”

The Republican proposal would result in $132.3 million in tax relief in FY 2021-22 and $182.8 million in relief in FY 2022-23 (July 1, 2022-June 30, 2023), according to Fox. This is a solid plan.

Connecticut’s economic struggles need no introduction. Indeed, the U.S. Department of Labor reported in late December that the economy, which never completely recovered from the 2008-10 Great Recession, has been hit hard by the COVID-19 pandemic. CT News Junkie reported Jan. 4 that the Republican sales-tax proposal came “after a year of skyrocketing inflation at the grocery store and the (gasoline) pump.” Accordingly, it makes sense to reduce a tax – and a regressive one – that all state residents have to deal with.

What Sen. Kelly and his caucus have offered may be just the beginning. Mr. Phaneuf reported the Republicans “would support long-term tax relief if revenue projections surge again later this year.”

Accordingly, the Republican sales-tax plan is worthy of support when the regular 2022 legislative session kicks off Feb. 9. Bipartisan backing is a possibility. Mr. Phaneuf reported Gov. Lamont “is open to discussing proposals to cut state taxes.”

When the GOP made its proposal, Senate President Pro Tempore Martin M. Looney, D-New Haven, said he would be open to it.

Adoption of the Republican plan would provide tangible benefits to all Connecticut residents.

Capitol policymakers – Gov. Lamont and all legislators – were sent to Hartford to make decisions that would have positive effects on the daily lives of their constituents.

The governor and lawmakers should bring the GOP sales-tax plan to fruition.

Contrast all this with Gov. Lamont’s (legally questionable) tax-rebate plan, which would serve a much narrower range of beneficiaries than the GOP plan would.