Malloy Budget Includes Car, Clothing Tax Exemption

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    NBC Connecticut
    Gov. Dannel Malloy delivered his budget address to the legislature at the State Capitol in Hartford on Wednesday.

    Gov. Dannel P. Malloy's new budget proposal reinstates the sales tax exemption on clothing as well and eliminates property taxes on most motor vehicles.

    The two-year, $43.8 billion plan, released on Wednesday, would reapply the clothing exemption on July 1, 2014. It would apply to articles of clothing and footwear costing less than $25.

    The reinstated $25 exemption will cost $55.5 million.

    Starting on July 1, 2015, the exemption would apply to clothing and footwear costing less than $50. The $50 exemption will cost $143.3 million.

    Malloy's plan also calls for a tax exemption for the first $20,000 of a vehicle's assessed value, so car owners whose vehicles are worth less than $28,500 would pay no property tax on those vehicles. The governor said that would affect about 90 percent of car owners. 

    "To ease the transition, we can allow municipalities the option of providing this exemption, or a portion of it, for the tax year, beginning July of 2013," Malloy said. 

    Malloy also addressed energy issues, including the expansion of natural gas, and proposed a $500 tax credit for customers who are near gas lines to connect to them.

    Malloy presented his budget address to state lawmakers at noon and said it does not include any new taxes.

    "The families and businesses of Connecticut have enough on their shoulders. This budget asks no more of them. In fact, I'm proposing we give them some much deserved help," he said.
       
    Malloy's chief of staff, Mark Ojakian, told The Associated Press on Tuesday that the two-year budget balances, covering projected $1.2 billion deficits in each fiscal year.

    While it includes spending cuts throughout state government, including deep reductions to hospitals, Malloy's office confirmed that the budget also increases overall general fund spending by roughly 5 percent in the first year and 3.7 percent in the second.

    Part of the plan Malloy announced on Wednesday morning will further consolidate state agencies. In 2011, there were 81. In 2014, there will be 53.

    Republican lawmakers have been critical of Malloy's spending, questioning a plan to spend $1.5 billion over 10 years to boost science, technology and engineering at the University of Connecticut.   

    Budget documents are now available on the governor’s Web site.

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