GOP Chair Urges A Surplus-Funded Tax Holiday, Malloy: What Surplus?

Connecticut Republican Party Chairman Jerry Labriola issued a statement Tuesday calling on Gov. Dannel P. Malloy to order a one-week sales tax holiday using a state budget surplus. However, Malloy said the surplus doesn’t exist.

In the statement, Labriola urged the governor to issue an executive order beginning the tax holiday on Dec. 20. He cited a $101 million surplus projected in the state budget, which he said was caused by over-taxation.

“This money belongs to the people of Connecticut who continue to struggle under one of the heaviest tax burdens in the country,” he said. “Between the imposition of the largest tax increase in state history and the retroactive application of the state income tax increase that reached back to Jan. 1, the governor owes it to the citizens he has been overtaxing to provide them with immediate tax relief.”

Labriola said Malloy has helped state employee unions and should eliminate the state sales tax for a week to aid other taxpayers and businesses.

The problem is, any additional funds the state has at the end of the year have already been committed to other areas. The state has reserved $75 million to help transition to Generally Accepted Accounting Principles and anything left over after that will be reserved to pay down debt associated with 2009 Economic Recovery Notes.

Asked about the statement after a Capitol press conference, Malloy accused Labriola of helping to create the problem that required those funds.

“He was part of the gang up here that pretended our books were balanced when they weren’t and he represents the party of governors who never put in Generally Accepted Accounting Principles that made that obvious,” he said.

Malloy said there are billions in unfunded state employee pension obligations which former Republican Gov. John Rowland entered into and then didn’t fund.

“So I’m the new guy on the block who didn’t create this problem. I never served in the Executive Branch, I never served in the legislature, why Republic governors didn’t institute Generally Accepted Accounting Principles, and why they didn’t pay their obligations I have no idea. But I intend to make sure that they’re paid,” he said.