(Updated 3:47 p.m.) “That’s above our pay grade,” Sen. Eileen Daily said Monday when asked about the tax package legislative leaders have been negotiating with Gov. Dannel P. Malloy’s administration. Malloy administration officials have been equally as quiet about how the $1.5 billion tax package will be modified.
Malloy said last week that he will change his tax package by reducing the $500 property tax credit to $300 by increasing the phase out of the income tax on some of the higher tax brackets. However, he refused to increase his proposed top tax bracket of 6.7 percent.
After a Finance, Revenue, and Bonding Committee meeting Monday, where lawmakers tabled at least two of Malloy’s proposals, Daily and co-chair Rep. Patricia Widlitz, were unwilling to spoil the progress of those negotiations by talking about any part of the package.
“Our stance is the same as it has been: we’re moving, we’re close,” Daily said Monday.
She said it’s impossible to say at the moment whether the tax package will be unveiled Tuesday, Wednesday, or Thursday. But sources say it will be Tuesday, since the spending side of the proposal will be released Thursday.
Once there is an agreement staff will need time to put everything together, Daily added. There’s a meeting of the Finance Committee scheduled for Thursday too, which gives the co-chairs a little bit of a buffer. The Finance Committee deadline isn’t until April 27, but Malloy has pushed the budget deadline up to May 6.
“We’re not in a position to say anything until every one sings Kumbaya,” Widlitz said.
Daily admitted there’s likely to be changes to the Manufacturing, Machinery, and Equipment payments to municipalities. Malloy himself has admitted his tax package isn’t perfect when it comes to the elimination of the these funds for municipalities, but he maintains his desire to ultimately eliminate the funding even though his final proposal may be more gradual in weaning the towns off the funds. The funds from the state help offset the property taxes towns are unable to collect on manufacturing equipment.
Aside from that admission, Daily and Widlitz revealed little else Monday.
It’s unclear if the committee will change the increased taxes Malloy has proposed for the aviation , marine, and automobile industries. Representatives from those groups have said Malloy’s proposal to eliminate the sales tax exemptions on planes, boats, and vehicle trade-ins will cost their industry jobs.
But during a public hearing back in March, Malloy’s Budget Director Ben Barnes, didn’t necessarily buy the arguments.
“We’re taking their protestations under advisement,” Barnes told the Finance Committee on March 7.
He said Malloy and the administration haven’t come to the conclusion yet that what advocates of those specific industries describe as an exodus from their industries and a loss of jobs, will actually happen.
“If significant drop offs in economic activity occur we will take that into consideration,” Barnes said.
But he said the truth of the matter probably lies somewhere in between what advocates for the industry are saying and what will actually happen should the legislature approve the increases.
That may also be the place where the finance package comes together.
Gian-Carl Casa, undersecretary for legislative affairs, said discussions are continuing and “we expect them to be productive.”
Asked to compare this years negotiations to last years, “there’s no comparison to the recent past,” Daily said. “Much more progress is being made. The give and take is much better.”
Rep. Kathy Tallarita, D-Enfield, said lawmakers are as much in the dark about these discussions and negotiations as everyone else in the building. She said in years past there at least used to be rumors, but this year there seems to be little information getting out about what’s happening in those meetings.
Lobbyists also bemoaned the discipline of the Malloy administration calling it unprecedented.
The closed-door budget meetings include Democratic legislative leadership, members of their staff, and members of the Office and Policy and Management budget team. Republican legislative leaders will unveil their alternative budget proposal this week too.
