Republican challenger Tom Foley said he’s been talking about eliminating the state income tax on Social Security recipients for the past three or four weeks, but Sunday was first time anyone can remember him making the statement.
What Foley didn’t say was that the state already exempts the first $50,000 of Social Security income for individual filers and the first $60,000 for joint filers. The exemption on the books already benefits about 320,000 tax filers and costs about $79 million a year, according to the Office of Fiscal Analysis.
Foley did admit that exempting the rest of Social Security income from state taxes would cost the state about $40 million in revenue.
In order to be fair, Foley said he would also exempt teacher pension payments from state income tax because teachers don’t pay into the Social Security system or receive Social Security payments.
Democratic Gov. Dannel P. Malloy has already started to phase out the state income tax on teacher retirements.
The 2015 budget includes a 10-percent exemption on retired teacher pensions, which increases to 25 percent in 2016 and peaks at 50 percent in 2017. Malloy said he signed legislation creating a panel to study the state tax system, including income taxes on Social Security recipients. Foley criticized him Sunday and Monday for not doing enough for seniors.
“The governor obviously doesn’t support it,” Foley said Sunday referring to his proposal to eliminate income tax on Social Security.
But Foley was vague about where he would find the money in the budget to make up for the loss in revenue.
“We’re going to get rid of corporate welfare,” Foley said. “We’re going to save money on what the state pays for health care services. We’re going to eliminate fraud and waste.”
The 2016 budget, according to nonpartisan fiscal analysts is projected to be running a $1.278 billion deficit. The next governor will have to find a way to balance the budget by February 2015.
Based on the information from the Foley campaign, if elected Foley plans on eliminating more than $400 million in state revenue that is currently part of the state budget.
That more than $400 million in revenue includes $90 million for the elimination of the income tax on Social Security recipients and teacher pensions, the $30 million it would cost the state to reimburse some municipalities for eliminating the property tax on motor vehicles, and $300 million for the half-percent sales tax cut he plans to implement. In addition, Foley said he would eliminate the $250-per-year Business Entity Tax, which would cost the state more than $30 million in revenue.
“He was saying things today that he’s never said before because he’s seeing what I’m seeing — he’s losing,” Malloy said Sunday.
“You’re makin’ things up as you go along,” Malloy told Foley Monday during their last debate on WPLR 99.1 FM. “Yesterday, you came out with a tax proposal that you’ve never told anyone before. It sounds a little desperate. You’re sounding a little desperate.”
Foley said Monday night at Bobby V’s in Windsor Locks that he doesn’t believe the cost estimates on the teacher pension exemptions from nonpartisan analysts.
He also expressed confidence that his campaign would win the election by 3 to 5 percent.
The most recent public polling has Malloy up by 3 points.