NB Politicus

The fictional “Bob” in the new commercial is the same “Bob” who ran for Guv in 2018

Posted in Governor, Money in Politics, Republicans, state budget, state government by nbpoliticus on February 2, 2022

by John McNamara

Bob Stefanowski’s story is the stuff of hardscrabble immigrants making it to America in the 20th century to raise their families and realize the American Dream.

That is the narrative in Republican Stefanowski’s re-branding to voters in his first television commercial for Connecticut’s GOP gubernatorial nomination in 2022. No doubt that Mr. Stefanowski’s parents worked hard, played by the rules and got a piece of that American Dream for their son to attain wealth gained in a career in financial services at GE Capital, UBS and a London-based investment and private equity company. Bob ’22 wants you to know he is just a son of hometown North Haven who can make Connecticut more affordable with the business acumen he acquired in those investment banker jobs.

Surrounding himself with working folks in the commercial (if you watch television only a little you’ll see the ad multiple times) Stefanowski pledges to cut sales taxes and keep cutting taxes after he forensically takes state spending apart to identify all the waste that he implies exists. State Comptroller Natalie Braswell can save the Bob campaign the trouble by pointing out the forensics on the state budget already exist. They are continually updated at the “Open Connecticut” website created by former Comptroller Kevin Lembo where every payroll, contract and purchase in state government can be found at the click of a mouse.

Once Stefanowski gets “under the hood” it follows that he will then be able give voters specifics on where the waste is and exactly what state government should be spending tax dollars on in his first biennial budget.

The race for Governor is shaping up as a re-run of Stefanowski versus Lamont

Don’t count on it. Even Chris Powell, the very conservative Journal Inquirer columnist with a disdain for anything liberal, points to the empty rhetoric of Bob ’22: “Stefanowski’s critique of government in Connecticut was fair enough – that the state has become less affordable for the middle class and less safe. But he did not offer a detailed platform. While he noted that Connecticut can’t cut taxes without cutting spending, he didn’t specify where this should be done.”

Stefanowski is not likely to offer that “detailed platform” of draconian cuts and lower taxes before November 8. He’ll continue to serve up slogans within a make-believe, trickle down economics policy that leaves middle income and working families behind every time.

In 2018 Stefanowski bought the Republican nomination, bypassed a convention of party regulars and won a plurality in a crowded primary field to take on Ned Lamont. He edged out candidates such as Mark Bouton, the multi-term Danbury Mayor, who many observers thought would have been a more formidable general election foe against Ned Lamont. Boughton is now Lamont’s Tax Commissioner in charge of doling out federal infrastructure money. With the departure of former legislative leader Themis Klarides for GOP Governor, Stefanowski’s strategy is likely to work again for the nomination.

At issue is whether the CT Republican Party, its identity frayed by the wrath and authoritarianism of 44, can serve up a wealthy businessman for a fourth time. Tom Foley lost to Dannel Malloy twice and Stefanowski lost a close race to the self-financed Lamont in 2018 as Lamont bucked a trend of candidates of the same party not succeeding the incumbent.

The path for a wealthy Republican or any Republican to take back the Governor’s office won’t be easy. The 2018 Election was a better opportunity at the end of Governor Malloy’s two terms. Democrats are hoping a Republican nominee who demonizes government and has no public service record will fail a fourth time.

Governor Lamont, touting his moderate’s socially liberal and fiscally responsible brand, enters the 2022 gubernatorial race with a record of managing the mother of all crises (the pandemic) competently, a growing surplus and new federal help to address infrastructure and transit needs that didn’t exist four years ago. He’ll use those incumbent tools to offer targeted tax cuts of his own that will likely blunt the empty bromides from Bob Stefanowski who despite the new branding and pledge to cut taxes (it’s the sales tax not the income tax this time) is the same Bob who ran in 2018.

“Tax Equity” Proposals Call For Reducing Regressive Sales and Property Levies, Raising Rates On Wealthy

Posted in Governor, state budget, state government, Tax Policy by nbpoliticus on March 21, 2021

By John McNamara

Bills that would dramatically alter the way Connecticut taxes individuals and businesses were the subject of a marathon hearing at the Legislature’s Finance, Revenue and Bonding Committee on March 15th.  An overwhelming majority of the more than 300 individuals who testified supported tax reforms but passage will face significant hurdles in the 2021 session.

The “tax equity” proposals, co-sponsored by New Britain Democratic legislators State Senator Rick Lopes (D-6), State Rep. Manny Sanchez (D-24), State Rep. Bobby Sanchez (D-25) and State Rep. Peter Tercyak (D-26) and other lawmakers, provide tax relief to low- and moderate income households by reducing reliance on regressive sales and property taxes. High-income households would be taxed more than the current maximum of 6.99%. on their incomes to make up the difference.

A key provision contained in HB 6187 and SB 821 would adjust the state income tax on individuals earning $500,000 or more and joint filers earning $800,000. Proponents say the adjustments would make income tax rates fairer by raising the rate to 8.82% for individuals at $500,000 and joint filers at $800,000. For households earning $1 million or more the rate would rise to 12.69 percent. Governor Ned Lamont opposes any change in the current rates but a significant contingent of lawmakers. in the Democratic caucus are pushing changes to lower the overall tax burden on individuals and families below $500,000. Raising rates on wealthier households would generate $1.75 to $2 billion annually.

A coalition of unions and advocacy groups that mobilized turnout for the all day March 15thhearing assert that legislation would level the playing field and make the tax system fairer. According to a Voices for Children tax reform report “Advancing Economic Justice Through Tax Reform” issued last December, median income households with $76,106 in pre-tax income pay an effective tax rate of nearly 14% while the top one percent of tax filers with an average income of $3,092,389 have an effective tax rate of 6.5%. The effective tax rate takes into account the total tax burden of property, sales and income taxes on taxpayers. It means that a nurse or salesperson earning less than $100,000 now pays double the taxes comparably to wealthy individuals whose burden has been reduced further in recent years as the result of the Trump tax cuts for the “one percent” with incomes in the millions and billions.

A 2% statewide property tax “on the portion of the market value of homes in excess of $1.5 million” also dubbed the “mansion tax” drew opposition at the legislative hearing from worried homeowners, most of whom would not be effected by the levy on only the highest value residences. The tax on “mansions” with assessed values exceeding $1 million would raise $663 million. The same “mansion” tax is proposed in SB 171 with State Senate President Martin Looney sponsoring the stand alone bill.

Tax relief for the working class is part of the comprehensive legislation with an expansion of the Earned Income Tax Credit (EITC) to 50% of the federal tax credit at an estimated cost of $155 million. The Senate version of the bill also includes a state child tax credit similar to federal Rescue Act one designed to reduce child poverty. For property tax relief the tax credit would double to $400 on homes and motor vehicles at a cost of $63 million.  For COVID 19 relief a direct payment of $500 would be sent to individuals who have faced hardships and unemployment over the last year.

The Finance committee is also considering other provisions of the tax equity legislation that would generally lower the tax burden on working and middle income residents:

  • A 10% tax on digital ads placed in Connecticut by companies with digital ad revenue of more than $10 billion (Google, Facebook, and Amazon) generating $140 million annually.
  • Lowering the estate tax exemption to $2 million, eliminate the payment cap, and enact estate tax rates similar to the rates in effect before the Great Recession. This would generate approximately $162 million annually.
  • Increasing the base corporation business tax rate to 11.5% for corporations with gross income of $100 million or greater and extend and increase the current surtax to 20%. This would generate approximately $250-300 million annually.
  • Imposing a surtax of 5% on capital gains, dividends, and taxable interest for individuals with income in excess of $500,000 per year ($800,000 for joint filers). This would generate approximately $850 million annually.

Proponents of the legislation face a considerable amount of misinformation about impacts on working and middle income households whose effective tax rates would stand to be reduced by passage.  Any tax adjustment in the direction of equity always elicits arguments that the big taxpayers that the state depends on would flee like snowbirds to Florida and that businesses would go offshore if they haven’t already to avoid paying more taxes. Standing in the way of any change and buying into those arguments is Governor Lamont who made a “no new taxes” pledge to the Connecticut Business and Industry Association last week.

It remains to be seen how much the Democratic caucus and its leaders can move Lamont to support one or more of the provisions intended to reduce regressive taxes and make Connecticut’s tax system more equitable. Some are hopeful that Lamont will take a page from President Biden who is now calling for a higher rate on wealthy individuals making over $400,000 for public investments like infrastructure and to address a spiraling federal deficit from the Trump years. 

For now the Finance, Revenue and Bonding Committee, co-chaired by Hartford State Senator John Fonfara and Shoreline State Rep. Sean Scanlon, has its hands full in sorting out what provisions will move to a full vote in the General Assembly this session.

 

“Revolutionary” State Budget? Property Tax Relief, New ED Aid For NB Is Part of Democratic Package

by John McNamara

A tentative agreement among Democratic leaders on a biennial state budget  that begins July 1st appears to be good news for New Britain and other municipalities in terms of property tax relief and continued aid to the under-funded city schools.

Late Saturday (May 31) Democratic legislative leaders and representatives of the Malloy Administration agreed on a revenue package that will drastically cut the car tax. The measure will set aside the city’s property tax rate of 49 mills on vehicles and cap the tax for cars to no more than 29 mills in a statewide formula.   The levy on vehicles will be in effect for the 2015 tax year if OK’d in a final vote. At the same time the plan will designate a percentage of sales tax revenue for transportation and new funding to cities and towns to reduce burdens on property taxes.

New Britain's legislative delegation will wrap up the 2015 session June 3. From left Rep. Bobby Sanchez (25), Rep. Peter Tercyak (26), State SenatorTerry Gerratana (6) and Rep. Rick Lopes (24). Absent from photo is Rep. Betty Boukus (22)

New Britain’s legislative delegation will wrap up the 2015 session June 3. From left Rep. Bobby Sanchez (25), Rep. Peter Tercyak (26), State  Terry Gerratana (6) and Rep. Rick Lopes (24). Absent from photo is Rep. Betty Boukus (22). ( F Gerratana photo 2014)

The Democratic package, if approved by the Legislature, represents the most significant change in Connecticut’s tax structure in decades, making the system more progressive and fairer to New Britain and other cities.

Taxes will most certainly  increase by a smidgen for high-income individuals with the ability to pay. For most citizens burdened by one of the nation’s heaviest property tax burdens there is relief.  State Senate President Martin Looney (D-New Haven) called the proposal “revolutionary” and said “this budget meets the state’s obligations and provides historic property tax relief for the people of Connecticut,”  It includes provisions to:

–  Raise the income tax rate on millionaires from 6.7 to 6.99 percent

–  Maintain the state sales tax at 6.35 percent and designating half a percent each to local property tax relief and the Malloy transportation initiative. Proposed sales taxes on accounting, engineering, advertising and dry cleaning were eliminated from the plan.

– Triple the tax on computer and data processing from 1 to 3 percent.

– Adjust Payment In Lieu of Taxes (PILOT) grants to municipalities with high mill rates where state property and nonprofit institutions hold significant amounts of property.

As the legislative session ends New Britain’s legislators have been mobilizing to retain a fair share of municipal aid,  support state-funded programs and maintain New Britain’s share of education funding.

Details will be forthcoming over the next several days, but it is likely that the delegation has succeeded and the city will improve on the $85 million (covering 68%)  it now gets under state cost sharing formula to underwrite the education budget proposed by the Stewart administration at a flat-funded $124,183,673.

Despite billion dollar deficits confronting the Malloy administration and legislators in  state budgets since 2011, New Britain’s education aid has steadily increased over the last four years.  It will do so again if the budget package wins approval by Wednesday, June 3.

To be sure New Britain schools will remain under-funded in comparison to comparable communities in the absence of more equity in the way educational funding is distributed. The state budget package now on the table, however,  is a step in the right direction.  New Britain has fallen behind more sharply than others because of a consistent pattern of the city setting budget priorities that stiffed the schools year after year, but increased spending in municipal government. This year is no exception.

Attention now turns to the adoption of the municipal budget. The Common Council is due to act on  the Stewart Administration’s $224,757,851 budget and 49 mill tax rate by mid-June.  No matter how the city acts there is now room for optimism on property tax relief and education aid given the prospect of a “revolutionary” state budget plan being adopted.

A Vote For Dan Malloy

Posted in 2010 Election, Governor by nbpoliticus on February 7, 2010

In 2010 Democrats need a gubernatorial nominee who has the best chance of winning an office not held by the majority party in 20 years. The open seat for Governor has spawned a number of Democratic hopefuls, all of whom offer impressive credentials from local and state government and the business world. The choice boils down to an individual who can inspire rank and file Democrats and who demonstrates a capacity to govern that will translate into significant support from independent voters in a year when the electorate wants an end to State Capitol gridlock.

Dan Malloy, who led Connecticut’s fourth largest city for 14 years, is a seasoned and capable elected official who has credentials to navigate the state out from under its systemic fiscal problems. A Governor Malloy can restore public confidence in the Governor’s office. He offers an energetic approach to job creation, transportation, education and housing. His record in Stamford in those areas may be the best indication voters have as to what could happen throughout the state.

For months Malloy has been providing compelling reasons for Democrats to support him. A former prosecutor, Malloy is a feisty candidate who will take on the drivel that will come out Foley or whoever the GOP nominates. He favors the Citizen’s Election Program and a fair system of public financing. The suggestion by some that deep pockets are a prerequisite for a Democrat to win is a democracy-killing idea. We don’t need local reinforcement of the U.S. Supreme Court decision to completely turn the country over to the fat cats.

Malloy, as are other Democrats pursuing the office, strongly advocates for health care reform, including the health care partnership pooling bill that would have saved consumers and cities and towns many millions of dollars had it not died by the Governor’s pen in 2009. That’s about a million bucks in savings for New Britain.

On the economy, Malloy has offered sound criticism of a moribund Rell administration with a call for a more expeditious use of federal Recovery Act funds. On job creation, a Governor Malloy would streamline the alphabet soup of state economic development agencies that could use both cost-saving consolidation and marching orders from an engaged Governor.

There is a clarity of purpose to Malloy’s candidacy in 2010. He’s put in the sweat equity to earn the support of Democrats who backed DeStefano in 2006. A testament to the clarity is that he would be in the race whether the heavily-favored Republican incumbent was in it or not. After 20 years out of the corner office, the Democrats need a candidate who can inspire our base and expand support to unaffiliated voters in 2010. Malloy has shown the drive and commitment to be that candidate.

– John McNamara