Republicans Ask That Any Surplus Be Applied To Lower Tax Burden
by Christine Stuart | Apr 18, 2011 9:08am
(4) Comments | Commenting has expired
Posted to: State Budget
During a press conference last week Republican leadership suggested Gov. Dannel P. Malloy lower his tax increases by $175 million because that’s how much surplus revenue there will be at the end of this fiscal year.
“Since the governor came out with his budget we have an additional $175 million,” House Minority Leader Lawrence Cafero said last Thursday. “Now you would think you’d take that money and say here’s my opportunity to lower the amount that I taxed.”
Roy Occhiogrosso, Malloy’s senior communications adviser, said he has no idea what Republicans are talking about when they’re talking about an additional $175 million.
He said the consensus revenue estimates come out in January and they come out later in April so he had no idea what number the Republicans are referring to.
Republicans said they are referring to numbers from the nonpartisan Office of Fiscal Analysis, which modifies its revenue estimates all the time. They maintained that any surplus be applied to lower Malloy’s proposed $1.5 billion tax increase.
Occhiogrosso said he understands estimates are constantly changing based on trends, but wonders why Republicans are automatically jumping to the conclusion any surplus should be used to reduce tax increases.
“The notion that you have to take that additional revenue and immediately do something with it is one of the problems that has existed up here,” Occhiogrosso said. “Every time additional revenue has popped up in the last at least 10 years, maybe 20 years there’s a rush to spend of a rush to cut taxes. As opposed to putting some money away , as opposed to a rush to paying down some debt, which is a significant piece of the governor’s budget proposal.”
Occhiogrosso said the economy isn’t the only reason the state is currently experiencing a $3.3 billion budget deficit. He said “bad fiscal practices,” have also contributed to the state’s budget woes.
“This governor is trying to put a stop to that,” Occhiogrosso said.
Better numbers about the state’s fiscal position will be released later this week after the tax deadline passes April 18. And previous projections, the latest done by OFA on March 25 , assume the state will borrow at least $646.6 million in Economic Recovery Notes. At least a portion of the state’s surplus will be dedicated to paying back those Economic Recovery Notes, but the notes haven’t even been put out on the market yet.
The Office of Fiscal Analysis is expected to come out with its report on the state’s budget next week and the Appropriations and Finance Committees are expected to release their budgets before Monday, April 25.
Tags: budget, taxes, Republicans, Malloy
(4) Comments
posted by: ... | April 18, 2011 9:40am
So we can’t have a surplus to pay down our debt? I agree that if reductions to taxes in this package are possible and responsible, then do it.
But eliminating our deficit is only the first step to a better government and business climate. Reducing our overwhelming debt with some of these surpluses will bring an even stronger message to our business community that just like them, our state can pay off what it borrows. And of course cuts will need to be consistent as well.
posted by: hawkeye | April 18, 2011 1:52pm
At this point, the $175. projected surplue, appears to reflect some hapeful political posturing.
Talk is cheap!
posted by: Matt W. | April 18, 2011 2:58pm
Joness: I’d love to agree but on the federal level as well as here in CT, every time taxes are raised with the promise of paying down the debt, the debt magically increases along with the new taxes. There are a bounty of excuses which come as fast as objections can be raised but they usually center around the CT Elderly and Pupply Anti-starvation program which as far as I can tell carries administrative costs somewhere between that of NASA and the Nation of Brazil.
Are we really going to fall for the proposition that, “this time we really mean it - honest”? Had we not time and time again been conciliated with promises of fiscal responsbility and efficient government, I might be willing to give them the beneift of the doubt but this government has proven by how far it has allowed this situation to persist that it will fight with everything it has to consume taxes and grow bigger. Ironically it seems, starvation is the only answer b/c everytime we give the GA a cookie, they use it as collateral to borrow a glass of milk.
posted by: ... | April 18, 2011 7:47pm
You’re right Matt. The issue and the promise has to be taken with a grain of salt because it has been tough.
We would probably have to take this action while simultaneously creating either a temporary freeze on any future bonding proposals, or create (if there isn’t one already) an annual cap on what our bonding commission spends. Because it seems they can apply a lot of borrowing for infrastructure projects, and we shouldn’t necessarily halt those and risk degrading aspects of our state.
But shouldn’t these monies also be re-applied to our Rainy Day Fund? We wiped it out for this last recession to keep us from a real state meltdown. And I would be curious to hear how much has been gradually reapportioned to its coffers by our states annual revenue, if any at all.
If it isn’t paying down the debt solely with surpluses, we should be refunding this program to preserve our state if there are any future crises like the 07’-09’/10’ recession.