There's a plan ready to go, Ned
In a post-primary commentary, Democratic gubernatorial candidate Ned Lamont wrote: “Decades of governors — both Democrat and Republican — failed to make the tough choices, and today our state is heading in the wrong direction as a result.”
He voiced the same theme in his first general election commercial, vowing to succeed where prior governors failed.
On Thursday he gave some hint where he is headed, outlining a plan to restore and expand the property tax credit that was eliminated during the Malloy administration to balance the budget. The expansion would include extending tax credits to an estimated 25,000 senior citizen renters. Recognizing the state is in no condition fiscally to do so right away, Lamont would phase in the tax credit over four years.
The state confronts a $4.6 billion deficit over the next two years. And that will require making far tougher choices. If Lamont wants to expand well beyond his toe in the water property tax proposal, he could gain instant credibility by embracing the broad outlines of the report produced in March 2018 by the bipartisan Connecticut Commission on Fiscal Stability and Economic Growth.
It would carry political risks. Being a realistic policy plan, it contains good news and bad. My betting is that many voters, tired of the baloney, will embrace sensible and substantive ideas.
The 14-member commission, filled largely with business leaders (labor complained about a lack of representation), made a serious attempt at finding a plan to turn Connecticut in a new direction.
The committee called for a phased-in, across-the-board reduction in income tax rates, beginning by lowering the highest bracket from 6.99 percent to 5.75 percent. It would collapse tax rates into three brackets — 5.75 percent for those making $200,000 and above, 4.5 percent for those making between $50,000 and $200,000, 3.5 percent from incomes between $10,000 and $50,000, and eliminate any tax on incomes under $10,000.
These lower rates would make Connecticut competitive with its neighbors and spur investment and consumer spending, the committee argues.
The committee recognized, however, that fiscal realities require the state to reform taxes, not simply cut them. So it calls for an increase in the sales tax from 6.35 percent to 7.25 percent. When you factor in the sales taxes paid to county and local governments in neighboring states, nonexistent in Connecticut, that rate would be competitive, the committee concluded. And it is a progressive tax. If you’re rich enough to afford big-price-tag items, you pay a big sales tax.
The report calls for repealing the gift and estate (death) taxes, which it found are a leading cause of driving wealthy, high-paying taxpayers from the state.
It would eliminate the business entity tax but, controversially, calls for a new corporate income tax, tied to payroll, to raise $475 million, with breaks provided for small businesses. “It is important that the business community shares some of the burden for what will be a major reduction in taxes for individuals and families,” states the report.
It recommends using proceeds from tolls and a hike in the gas tax to pay for rebuilding the transportation infrastructure.
Progressives should like its call to gradually increase the minimum wage to $15, and fiscal conservatives its recommendation to cut state spending by $1 billion.
I suggest Lamont back the plan because there are no signs that the Republican candidate, Bob Stefanowski, will move from his proposal to phase out the income tax. It got him this far. The income tax funds about half the budget. Stefanowski counts on a supply-side miracle to close the deficit. It didn’t work in Kansas.
There is a serious plan to put up against that one, Ned. So how about it?
Paul Choiniere is the editorial page editor.
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