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While there is plenty of room to argue over details, Gov. Dannel P. Malloy's frank approach to addressing the state budget crisis is welcomed. In a meeting with newspaper publishers and editors at the governor's residence Monday, Gov. Malloy came across as a confident chief executive willing to take the political hit that will come with proposing massive tax increases and substantial budget cuts.
Gov. Malloy and his budget director presented more details about the tax increases than the budget cuts. The sales tax would jump from 6 percent to 6.35 percent, with .10 percent used to directly provide revenues for municipalities. Exemptions for low-price clothing would disappear. The governor is also asking the legislature to eliminate the property tax credit, which now reduces the income tax bill for homeowners by $500.
The income tax rate would go up for every family making $100,000 or more. Those making $100,000 to $200,000 will see their tax rate go from 5 percent to 5.5 percent, with the rate gradually increasing up the income ladder, with those making $1 million or more paying 6.75 percent. The top rate is now 6.5 percent.
All told, the Democratic governor seeks to increase taxes $1.5 billion annually.
To close a $3.6 billion budget gap, the governor also proposes $1.8 billion in budget reductions and expects greater success in gaining federal reimbursements.
Spending reduction details will come when Gov. Malloy unveils his budget proposal Wednesday. He anticipates substantial savings from labor concessions. He warned of major layoffs if state unions don't heed his call for shared sacrifice. Gov. Malloy needs to stick by that tough negotiating stance.
If there is a concern, it is the size of the proposed tax increases and their potential to slow a recovery. We urge lawmakers to search for more savings and reduce the size of the tax increase.
Most importantly, however, the governor is promising to propose an honest budget without gimmicks or borrowing to pay ongoing expenses. That's a necessary departure from recent years.