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    Local Columns
    Monday, April 29, 2024

    Eyeing the Fairfield County piggy bank

    You can take Gov. Dannel Malloy, the former mayor of Stamford, out of Fairfield County. But it is hard, it seems, to take Fairfield County out of the governor.

    Take this year's budget talks as an example.

    Malloy, after taking office for his first term, whipped up a big tax cake to help the state eat its way out of its financial hole, and a little bit from everyone got baked in.

    The governor called that budget recipe "shared sacrifice," and not only did taxes go up broadly across the economic spectrum, but state workers were made to pitch in with givebacks.

    Malloy then tweaked the top income tax rate from 6.5 percent to 6.7 percent, but refused when some Democrats wanted to go higher.

    The status quo still gives Connecticut a slight edge over the states of New Jersey, at 8.97 percent, and New York, at 8.82 percent.

    I suspect the governor knows that the closer you get to narrowing that gap, the more you edge toward killing the golden goose of Fairfield County, an enormous source of revenue for the state, a pool of taxable wealth that is helping float Connecticut's poor cities.

    There is a handful of Connecticut billionaires whose tax payments can significantly move the Connecticut revenue meter, even more than the thousands of slot players working the machines at Foxwoods and Mohegan Sun, whose gambling habits fluctuate with the economy.

    Malloy, who assembled a political career in part from luring corporations and their chieftans to Stamford and Connecticut, knows this tax dynamic very well.

    Connecticut first found its niche as a haven for the rich back when the state had no income tax and it was a simple proposition that efficient commuter trains could whisk you from New York taxes into a calm tax paradise that also had wide lawns, good schools and boating.

    Gov. Lowell Weicker's imposition of an income tax began to change the equation and, each time the rate notches up, Connecticut loses some ground in the competition for very rich incomes to tax.

    And now, as the governor negotiates a budget compromise with General Assembly Democratic legislators proposing higher taxes for couples with income of more than $1 million, he may begin to channel his inner Fairfield County.

    First, the governor seems determined to keep his campaign promise to not raise taxes in general, even if some new revenues he is accepting might be at least loosely considered tax hikes.

    But I think he is even more determined not to close the Fairfield County tax gap, a set of numbers that he knows are routinely run by wealthy homebuyers in the back seat of Realtors' cars, comparing New York and Connecticut suburbs.

    I suspect the governor also wants to pare spending and tax increases for this budget, knowing that a lot of big borrowing and spending lie ahead with his plans for a transportation makeover — one that will, most significantly, ease the traffic gridlock in Fairfield County.

    Protecting rich taxpayers is a curious instance of stubbornness for a governor who has been busy flexing his progressive credentials on the national political stage.

    The governor would probably be fine with changing the federal tax code to address income inequality.

    Go ahead and soak the rich with higher federal tax rates, he might suggest.

    Just don't make Fairfield County less appealing to them.

    This is the opinion of David Collins.

    d.collins@theday.com

    Twitter @DavidCollinsct

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