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Malloy scraps $55 refund

Gov. Dannel Malloy addresses the press in Hartford after deciding to abandon his plan to send $55 refunds to Connecticut taxpayers.   (Photo by Christine Stuart)
Gov. Dannel Malloy addresses the press in Hartford after deciding to abandon his plan to send $55 refunds to Connecticut taxpayers. (Photo by Christine Stuart)

HARTFORD, Conn. – Gov. Dannel P. Malloy’s administration is scrapping plans for a $55 taxpayer refund and a supplemental pension payment as tax revenues come in “hundreds of millions” of dollars less than expected.

Malloy’s Budget Secretary Benjamin Barnes informed the legislature of the change of plans in a letter Monday morning.

“We have not yet established consensus revenue, but will by April 30. Any surplus this year will be deposited into the Rainy Day Fund. We do not anticipate enough revenue to provide a tax refund or to make a supplemental pension payment, as we had hoped in January,” Barnes wrote.

Malloy had proposed using $155 million in state surplus funds to give $55 sales and gas tax refunds to an estimated 2.7 million people. However, last week the Office of Fiscal Analysis cast doubt on the proposal, saying income tax collections were coming in weaker than expected.

See the complete story at CT News Junkie.

 

Comments

6 responses to “Malloy scraps $55 refund”

  1. EveT

    Thank goodness! Not that an actual budget surplus wouldn’t have been nice, but to waste money mailing out $55 checks was just a foolish idea from the start.

  2. John Hamlin

    This idea was an indication of how desperate the current administration is in the face of higher taxes, higher unemployment, and economic failure. It was an emblem of their failed economic policies. We need a governor like Andrew Cuomo or Scott Walker to bring some fiscal sanity to Connecticut.

  3. Casey Smith

    From Secretary Barnes’ letter:
    .
    “However, based on the income tax collections received so far, it is clear that taxes on capital gains in 2013 will be HUNDRED OF MILLIONS below expectations. This is a result of the EXPIRATION OF THE BUSH TAX CUTS on JANUARY 1, 2013.”
    .
    Unbelievable. They were expecting hundreds of millions of dollars from something that expired over a year ago. And of course, they are dragging Bush into it. No, Mr. Barnes. This one falls squarely at your feet.

  4. the donut hole

    If you were a CEO / CFO of a private sector company who reports earnings and forecasts to the SEC, you could be jailed for making bogus forecasts like this. Gross incompetence is not a defense either under Sarbanes Oxley.

  5. the donut hole

    @Casey Smith. Not sure how they can possibly blame Bush here. But I see your point about just mentioning the name is a way to cast blame elsewhere. In fact, people decided to cash out before the Bush cuts expired lifting revenues in 2012 and causing them to crash in 2013.
    .
    When the Bush tax cuts expired, long term capital gains rate went from 15 to 20%. Married earners of more than 250,000 are subject to an additional 3.8% tax under Obamacare. The resulting increase from 15 to 23.8% is a 59% increase in the capital gains tax rate. (Worse, in CT these are treated as ordinary income at the full marginal rate. So if you are in this same income bracket you pay an additional 6.7% tax).
    .
    Whoever forecasted similar results in the face of a 59% increase has some big time explaining to do.

  6. Casey Smith

    @ Donut – What baffles me is how they either didn’t know or “forgot” about the tax cuts no longer being there. My tax accountant was very careful to go over the tax sunset clause with me, not once, but twice to make sure I understood that the tax breaks we’d been getting were going – going – gone.

    The other scary part is that the Governor and Mr. Barnes expects the municipalities to “negotiate” with them about the budget. Yeah, I can see that really happening in Norwalk where our ECS funds are always less than Danbury’s and the unfunded mandates flow from Hartford like storm water gushing from 95 into the Norwalk River.

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