Gov. Dannel P. Malloy said Wednesday that he hasn’t taken a position on several tax breaks he proposed last year, but which aren’t scheduled to go into effect next fiscal year.
When Malloy and the Democrat-controlled legislature finished last year’s budget they had included about $220 million in future tax breaks after declining revenue figures prevented them from being included in the 2015 pre-election budget. The tax breaks Malloy and lawmakers pushed into the future included an end to the corporation tax surcharge, sales tax exemption on clothing and over-the-counter medication, an income tax credit for retired teachers, and an increase in a tax credit for the working poor.
“I can only tell you we’re in the early stages of developing next year’s budget and we’re not intending to raise taxes,” Malloy said Wednesday after the state Bond Commission meeting.
“With respect to the surcharge I’ve not taken a position,” Malloy added. “With respect to other things I think we’ll be able to accommodate those and we’ll begin the process of implementing other steps as well.”
Sen. Scott Frantz, R-Greenwich, said delaying those tax breaks would be a tax increase for the people they impact. But he acknowledged that it’s an option the administration has and he wouldn’t be surprised if they take advantage of it.
He said he also wouldn’t be surprised if they continue to delay payment of the Economic Recovery Notes the legislature borrowed to balance the budget in 2010.
“They’re in a cash crisis right now,” Frantz said. “They need all the cash that they can get, but it goes beyond that. It’s not only a cash-flow crisis, it is a fiscal crisis.”
Malloy administration budget director Ben Barnes said he makes it a point not to limit the options the governor has to balance the budget.
“I’ll let his words speak for themselves on his appetite for changes in taxes,” Barnes said Wednesday.
He said he will present the governor with all sorts of alternatives, including adjusting the expiration dates for taxes.
“I’ll give him all kinds of alternatives, many of which will be deemed unpalatable or ill-advised for one reason or another, and we’ll come up with a budget that he supports and that we can hopefully gain support from the General Assembly,” Barnes said. “That’s my job to give him a wide variety of options to solve the budget problems that we face.”
Asked about how he views the no tax increase pledge he made on the campaign trail, Malloy said that reporters were asking him about hypothetical situations that he doesn’t believe will happen.
Malloy was asked if he would sign a budget the legislature gives him, if it includes tax increases.
“You’re asking me about situations that I don’t think are going to come about,” Malloy said. “We’ve negotiated budgets between myself and the legislature in the past that we could all live with.”
He said he’s been pretty clear about his expectations as far as new taxes are concerned.
“That there not be any new taxes,” Malloy said.