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    Saturday, May 04, 2024

    Malloy's insincere, inconsistent explanation

    At his end-of-the-legislative-session press conference last week, Gov. Dannel P. Malloy tried to explain why he will sign into law a budget that violates his repeated campaign pledge not to raises taxes. The two-year spending plan will raise $2 billion in additional state revenues over the next two years from new taxes, increased taxes or continuing taxes that were set to expire.

    Gov. Malloy's first rationalization was that the legislature did it.

    "I proposed a budget on Jan. 18, it was balanced, it did not raise taxes," said Gov. Malloy, adding, "I fought for that budget."

    But, darn it, the legislature went ahead and passed a budget with tax increases.

    The reality is that the governor did not fight to prevent a tax increase. That would have meant making it clear he would veto any budget bill that was not in keeping with his campaign pledge. Instead, this Democratic governor privately negotiated with the leaders of the Democratic majority in the legislature and shook hands on the budget deal with its business and income tax increases.

    The Democratic majority, kicking and screaming, then narrowly passed the budget bequeathed by their leaders and the governor — 73-70 in the House, 19-17 in the Senate.

    Gov. Malloy's second rationalization was that back when he was preparing a budget that kept to his promise not to raise taxes he never could have imagined the legislature would present him with such a great budget that did raise taxes.

    More specifically, the governor told reporters, "I did not envision a budget that would make as much progress on property tax reform or on transportation as this budget makes."

    Indeed, this budget will provide for substantial increases in state revenue for cities, like New London, with large percentages of nonprofit and public properties exempt from property taxation. Theoretically, that could mean property tax reductions in those communities. More likely, local politicians will spend the additional state aid, but property tax increases will be smaller.

    The two-year budget plan also caps at 32 mills next year and 29.4 mills the following year the property tax that towns and cities can impose on motor vehicles. Some cities now assess double those rates. The state will compensate municipalities for the lost revenues.

    As for improving the transportation system in Connecticut, which Gov. Malloy set as a second-term priority, the new budget sets aside one-half percent of the sales tax for that purpose. The governor said that will mean a net increase of $300 million annually for transportation.

    In other words, property tax reform and improving transportation are such good initiatives it justified breaking his campaign pledge (except he didn't — see rationalization number one).

    How confident should cities be about this good news? Not confident at all, based on the legislature's record of abandoning promised tax relief. If the legislature again confronts deficits in the next two or three years, would anybody be shocked if that increased municipal aid to offset property taxes is reduced or delayed, or if some of that transportation sales tax money is diverted to the general fund?

    Well, at least some solace can be taken in the governor's assessment that, "We passed a responsible, balanced budget."

    On the other hand, maybe solace is not in order.

    According to the nonpartisan state Office of Fiscal Analysis, in the first fiscal year after the new budget, 2017-18, the state faces a projected $832 million shortfall — about 4 percent of the annual operating budget.

    And so it goes. 

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