Gov. Dannel P. Malloy ruled out tax hikes to fill a budget deficit, but a handful of advocates say that’s not fair.
A coalition of about 45 groups calling themselves the Better Choices coalition proposed increasing taxes, instead of cutting about $220 million in spending.
In an open letter to the governor and lawmakers, the coalition said “addressing revenue shortfalls with only more cuts is not fair.”
“Continued cuts will negatively affect all of Connecticut’s families and children who need essential services, people with disabilities and the elderly who need caring services, schools that need good teachers, and communities that need public safety,” the coalition wrote. “If our revenue projections are off, it is certainly not because the richest half a percent among us are struggling, or because our largest and most profitable businesses can’t afford to pay their share.”
But Malloy has refused to entertain a discussion about increasing taxes. At a press conference Monday, Malloy said flatly that “this is not a discussion about increasing taxes.”
Lawmakers and Malloy will look at reducing spending by about $220 million in order to make up for overly optimistic personal income tax projections used to create the budget approved in June.
The personal income tax revenue was short of projections by $109.3 million this month, according to Malloy’s budget office.
Legislative analysts and Malloy’s budget office will get together soon to agree on a revenue number for the 2016 budget. The so-called consensus revenue estimates will be released on Nov. 10.
Republican legislative leaders had said they expect the shortfall to be even bigger — around $400 million — but they declined to say exactly how they got to that number.
“According to my office’s analysis, which includes looking at weak income tax receipts, overly aggressive savings targets in the budget, debt payments, and anticipated shortfalls in federal grants and keno, the potential budget shortfall is well over $400 million,” Senate Republican Leader Len Fasano said Tuesday. “If the governor disagrees with this number, I would be more than happy to explain it to him in a room during real negotiations, not through statements in the press.”
Asked if he expects the deficit to get worse, Malloy invited Republicans to show up at budget negotiations with $400 million in spending cuts.
“I don’t think it’s the right number, but if they think it’s the right number and they have $400 million in reductions that they want to make they should bring them to the table,” Malloy said Tuesday.
The Better Choices coalition argues that the reason the state is facing this budget shortfall is related to a change in anticipated tax revenue.
“When we miss our revenue forecasts by less than 1 percent — as the administration is indicating here — the first place we look should not be these important programs,” the coalition wrote. “Instead, we should look first at addressing a system where working and middle class families pay almost twice the effective rate in state and local taxes than the richest among us do, and we should ask those richest to pay a little more.”
However, raising taxes even more than the $1.3 billion over the next two years isn’t likely to be received favorably by lawmakers as they head into their re-election campaigns.
Already the end of the 2015 legislative session will be remembered for its debate about Connecticut’s business environment and whether it’s taxing large corporations too much. The result of those discussions and the tax increases have yet to be realized.
General Electric, which is headquartered in Fairfield, has yet to announce whether it will leave Connecticut. But it formed a relocation committee to look at its options after learning in June exactly what was in the revenue package.