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.