Log In


Reset Password
  • MENU
    Columnists
    Sunday, May 12, 2024

    No-tax pledge traded away in budget talks

    In negotiating a budget deal last summer that raised taxes, Gov. Dannel P. Malloy violated his campaign pledge not to do exactly that. However, he got a heck of deal in the process, he told The Day Editorial Board on Dec. 3.

    “When people write editorials critical of raising taxes … remember the bridge, remember the exits, remember the additional lane on 95, because I would do that deal tomorrow, again,” Malloy told our board, which has criticized the governor for violating his pledge.

    The bridge Malloy referenced is the Gold Star Bridge. “We’ll probably end up spending $400 million to a billion dollars making sure it doesn’t fall down,” he said.

    The exits he refers to reconstructing run along the dangerous stretch of Interstate 95 through East Lyme, where, Malloy said, “people routinely die getting on and off the highway.”

    The additional lane is the one the state plans to add to both directions of travel on I-95 in our area, a move necessary to ease congestion and improve safety.

    These and other transportation initiatives will be possible, said Malloy, because he negotiated with fellow Democrats in leadership positions in the House and Senate to devote revenues from a half-percent of the sales tax to his transportation initiative, bringing in an estimated $300 million annually.

    Those negotiations also led to policy changes that will provide property tax relief for Connecticut’s cities, said Malloy, with another half-percent of the sales tax funding it.

    Cities like New London, with a high percentage of institutions that are nonprofit or public, and so tax exempt, are promised higher PILOT funding — payments in lieu of taxes — from the state.

    Urban dwellers will also be seeing relief in the taxes they pay on their cars. A new law caps the tax rate for cars at 32 mills starting July 1, 2016, dropping to about 29.4 mills in 2018. Car owners in cities with taxes north of 40 mills, such as New London and Norwich, will receive substantially lower car tax bills. The state is supposed to make up for the lost revenues cities will experience.

    “The only way to do that is to redistribute some amount of revenue and that is what got done,” Malloy said.

    The tax increases, which fell most heavily on business — about $1.2 billion worth — made up for the revenue lost when a portion of the sales tax was diverted to the transportation fund and for urban tax relief. They also allowed the legislature to maintain some existing programs.

    “I’m doing hard things and getting those things done,” Malloy told the board.

    Yet the bottom line remains that Malloy went back on his word. A pledge to voters should not be something traded away in negotiations.

    Malloy is betting that if he can get some big stuff done — initiating the rebuilding of the state’s transportation systems, getting the cost of state pensions under control, and continuing to see a drop in crime and prison populations — he will be remembered for that, not going back on a tax pledge.

    “I’ll take that record,” he said.

    Of course, what the legislature provides it can take away. With projected deficits facing it in the next couple of years, pressure will grow on the legislature not to divert that 1 percent of the sales tax to transportation and property tax relief after all.

    In the recent special session, the legislature did propose a constitutional amendment to prohibit lawmakers from raiding the State Transportation Fund (STF) for other needs, but voters likely won’t act on that until 2018. In the meantime, the legislature also diverted $35 million intended for the STF.

    Malloy may well be right that his ability to accomplish big goals will determine whether his tax-pledge reversal is a footnote or a memorable violation of the public trust.

    At least he was prudent enough never to say, “Read my lips.”

    Paul Choiniere is the editorial page editor.

    Twitter: @Paul_Choiniere

    p.choiniere@theday.com

    Comment threads are monitored for 48 hours after publication and then closed.