Jan 30, 2014
12:26 PMConnecticut Politics
In an Election Year, Malloy Gives Tax Rebate
Peter Hvizdak/New Haven Register
Gov. Dannel P. Malloy, with Derby Mayor Anita Duggato, center, and Lt. Gov. Nancy Wyman, right, announces a three-point plan for the budget surplus during a press conference Thursday January 30, 2014 at Derby City Hall.
Gov. Dannel P. Malloy announced his plans to spend the state's $505 million surplus Thursday, which includes a tax rebate to residents of $55.
Republicans have criticized the administration's portrayal of the surplus, saying it only exists because Malloy passed a historical tax hike and eliminated tax exemptions. On Thursday, the state Republican party accused Malloy of trying to buy votes.
Malloy plans to disberse the surplus with the rebate to residents, which will eliminate $155 million from the pot. He plans to deposit $250 mllion to the state's "rainy day" fund, which would bring the fund's balance to over $520 million. The remaining $100 million will go toward the state's pension fund.
Malloy has not yet announced if he's running for re-election, though a tax rebate to residents is certainly a clear signal he's looking to get their votes. Billed as a gas and sales tax refund, residents qualify for the $55 rebate if they earn less than $200,000.
“Connecticut has faced more than its share of challenges over the last few years. Now that things are beginning to improve, it’s critical that everyone shares in the recovery,” Malloy said in a press release about his announcement. “The plan I’m laying out today takes the responsible path. It puts money in the rainy day fund so that we can be prepared the next time we face financial challenges. It puts additional money into our pension fund so we can pay down our long term debt. And it provides a modest refund for residents who have faced more than their fair share of obstacles.”
News of Malloy's plans for the surplus was not well received from Republicans, who saw the news as a campaign gimmick.
“Dan Malloy thinks that he can buy the votes of Connecticut’s over-taxed families for $55," said Zak Sanders, spokesman for the State Republican Party in a statement. "Connecticut voters want jobs, not to be a part of Governor Malloy’s election year political stunt as he attempts to distract from his abysmal record. What Connecticut needs is real economic recovery, but as Governor, all Dan Malloy has given us is record tax increases, job-killing policies, and the worst economy in the nation—and $55.”
State Senator John McKinney (R-Fairfield), who is running for governor, called Malloy's portrayal of the surplus "irresponsible" because of a projected $2 billion defecit for fiscal years 2015 and 2016. McKinney also said residents are in need of tax relief—but it's relief that should be permanent.
"If the governor believes, as I do, that Connecticut families need real relief from his high sales taxes and gas taxes, then make the necessary spending cuts and lower the sales tax and gas tax permanently," McKinney said. "A one-time ‘sales and gas tax rebate’ from the governor who gave us permanent tax hikes in both the sales and gas tax is the height of hypocrisy.”
McKinney also suggested Malloy focus on paying down debt incurred under his administration and put additional funds into the state's pension fund rather than the rainy day fund.
In a joint press release, Senate President Donald E. Williams (D-Brooklyn) and Senate Majority Leader Martin Looney (D-New Haven) applauded Malloy's plan.
“Governor Malloy has taken a balanced approach that uses the surplus to strengthen the State’s future fiscal outlook by replenishing the Rainy Day Fund,” Williams said in a statement. “Additionally, paying down long-term debt will save Connecticut taxpayers in the future.”
In the statement, Looney added, “Governor Malloy’s plan is welcome news for low- and middle-income people. This is money that will be spent locally and stimulate our economy. At the same time, the governor’s plan works to address Connecticut’s long-term fiscal position.”
But candidate for governor and Danbury mayor Mark Boughton said a rebate isn't enough.
"Nice try, but $55 bucks won't make us forget about the last 4 years," Boughton's campaign tweeted.
Later on in the evening, gubernatorial candidate Tom Foley added in his own criticisms.
Foley's campaign spokesman Chris Cooper said Malloy was playing "three card monte" by taking $700 from residents and giving them back $55.
"Three years ago Governor Malloy raised taxes on Connecticut taxpayers by an average of over $700 per year per person. And now, in an election year, he says he will offer a small fraction of that back in a one-time rebate hoping people will forget about his tax increase when they vote in November. Does he really think Connecticut voters’ memories and math are that bad?," he said in a statement.
In an Election Year, Malloy Gives Tax Rebate