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Malloy Promises No New ‘Tax’ Increases

by Christine Stuart | Jan 19, 2012 6:30am
(7) Comments | Commenting has expired
Posted to: Town News, South Windsor, State Budget

Christine Stuart photo

Gov. Dannel P. Malloy at Oxford Performance Materials the first company to receive a 0,000 low-interest loan from the state’s new Small Business Express Package.

Gov. Dannel P. Malloy said Wednesday that he doesn’t plan on tinkering with tax increases to make up for the projected budget shortfall unveiled yesterday by the consensus revenue estimates.

Instead, Malloy will address the less than a half of percent drop in revenue by cutting spending. Republican lawmakers who were opposed to Malloy’s two-year budget with a built-in $1 billion cushion and the largest tax increase in the state’s history said it’s about time.

“We intend to end the year in balance,” Malloy said emphatically at an event in South Windsor.

He said there’s a reason he built a cushion into the budget because “you don’t know what your revenues are going to be.”

The same lawmakers complaining about the budget now, were criticizing it when it was proposed because it raised more revenue than the administration initially thought was necessary.

But despite his best efforts consensus revenue estimates released late Tuesday showed the budget on the precipice of a nearly $95 million deficit.

Republican leadership in the legislature was quick to issue a press release Tuesday questioning how Malloy planned to handle the situation in the wake of a $1.6 billion deal with the state employee unions that includes a no layoff provision.

“The deal the governor stuck with the unions really ties our hands and we still have not seen any savings on the spending side,“ House Minority Leader Lawrence Cafero, R-Norwalk,  said Wednesday. “The only option left is to significantly cut services to balance the budget.”

Malloy said cutting spending is exactly what he plans on doing. However, details of those spending cuts won’t be available though until next week.

“They want to have their cake and eat it too,” Malloy, who has promised to improve education and hold municipalities harmless in the second year of the budget, said Wednesday.

He said the state watches the revenue numbers “literally everyday” and what happened in Connecticut and other states with high income earners was a “precipitous fall off in the last few days of December.”

He said he reached out to surrounding states like Massachusetts, New York, and New Jersey and tried to find out if they were experiencing the same thing and “low and behold they were.” The biggest taxpayers were paying less in the fourth quarter than they had in the previous year.

The jump in revenues in the last quarter of 2010 can be attributed to potential expiration of the Bush tax cuts, which forced high income earners to realize their revenue in that year as opposed to the next, Malloy said.

“Having said that, that’s not an issue. We’re going to balance the budget,” Malloy said. “We’re going to make spending cuts that’s what we’ll do.”

Like last year Malloy continues to do things differently than his counterparts in New York and New Jersey.

On Tuesday, New Jersey Gov. Chris Christie proposed a 10 percent reduction in income taxes during his state of the state address.

“Gov. Christie has not funded his pensions prior to this year’s budget to the extent of $2 billion,” Malloy countered. “You’re looking at the first governor in the state of Connecticut to fully fund pension obligations on an actuarial basis.”

Meanwhile Republican lawmakers speculated that while Malloy won’t seek to hike any taxes in a budget adjustment year he will look for ways to increase revenues even if they don’t come in the form of a tax hike. 

Last week Malloy’s Budget Director Ben Barnes didn’t rule out changing regulations or policies in order to bring in new revenue to the state. The proposal Malloy announced last week to allow Sunday liquor sales is expected to bring in an additional $6.4 to $11.2 million in revenue.

Malloy is expected to roll out more policy changes in the weeks leading up to the Feb. 8 start of the legislative session.

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(7) Comments

posted by: Disgruntled | January 19, 2012  8:49am

Gee. The suggestion box was supposed to balance the budget. And the retroactive tax increase. And the lay-off of the state troopers.And the Stasi-like revenue officers digging into the affairs of average folks while corporations (love that FirstFiveJive) have their way with Nutmeggers in general. Oh! And the office in DC was supposed to open a flood of Federal welfare.And the weekend trips and international travel was going to bring in a flood of interest about Connecticut,not a collective yawn.
One does not need a helicopter ride to see the disaster unfolding statewide but Dan should fly over Perkin-Elmer and Norden to see the newly laid-off workers.
Perhaps Dan has it backwards…he and his cronies have been eating the cake for all of us up in Hartford.

posted by: Disgruntled | January 19, 2012  9:15am

Another clueless politician eating cake while skilled workers are laid off and their job functions shipped overseas.

“The PerkinElmer decision was news to Shelton Mayor Mark A. Lauretti.
“It’s a surprise to hear about the layoffs—this is the first I’ve heard of it,” said Lauretti, who is attending the U.S. Conference of Mayors in Washington, D.C. “No one calls to say they are laying off people.”

The “sudden” reversal in the states finances are hardly the result of yesterday’s stock market. When will Dan realize that HIS policies are the cause of our problems? We know the answer to that…never. He will always have a scapegoat to blame.Bush tax cuts. Weak economy.Unions.Internet retailers.Chris Christie.Rowland.Rell.Odd how he never points the finger at folks in his own party.

posted by: Disgruntled | January 19, 2012  11:15am

We might get Sunday liquor sales to help balance the budget and The Nutmeg King gets to fly off to Switzerland for the better part of a week!
Does anyone in Hartford have the onions to tell Dan that he should stick around the state and address state problems…that global travel and national travel is for family vacations harder now that his wife got that nice sinecure and has to attend “fundraisers”.
Well Dan. While you are over there,check in with UBS and ask where all the Stamford jobs went.

posted by: Disgruntled | January 19, 2012  11:33am

Dan goes to Switzerland and:

“RR Donnelley & Sons, a $10.6 billion global printing company, is closing its Windsor location in March, putting 117 people out of work.”

Those workers can get behind the Perkin-Elmer and Norden workers,who are behind LOTS of others.
Have some CAKE and eat it too,Dan,as the bakeries are good over there in Davos.

posted by: Disgruntled | January 19, 2012  1:53pm

And the hikes continue…

“Regents Approve Tuition, Fee Increases At 4 Universities, 12 Community Colleges”

Across the board on the local level,fees are increasing,services are being cut and Dan just hops a jet for Switzerland to show us that you CAN have your cake and eat it too—when someone else is paying!

posted by: Noteworthy | January 19, 2012  2:44pm

Malloy Promises….Again. He also promised to get $2 billion from the unions; to shrink spending; to as a last resort, demand tax increases; implement GAAP; and balance the budget.

Promises kept: Zero. Broken? At least 5 and counting…

posted by: Disgruntled | January 20, 2012  11:07am

Your tax dollars,hard at work!  Perhaps Dan should do a similar presentation in Davos!

“The Connecticut Department of Energy and Environmental (DEEP) is offering a special presentation entitled Ice For Sale on Saturday, February 4 from 10:30 a.m. – 12 noon, at Kellogg Environmental Center, Derby.”