Connecticut

Providing a Property Tax Credit Is Harder Than It Sounds

Ned Lamont has his own way to try to put more money in Connecticut residents’ pockets.

He’s proposed reinstating a property tax credit to about 900,000 middle and low income families, which would net each taxpayer about $183 dollars annually on average.

The Democratic gubernatorial nominee said of his proposal during Wednesday’s debate with his Republican rival, Bob Stefanowski, "Those are the biggest taxes that people pay. I have a targeted property tax cut that will make it easier for seniors to stay in their home and easier for young people to move into the state so we can get jobs back."

Stefanowski’s plan to phase out Connecticut’s income tax is feasible only if he eliminates the same amount of spending or comes up with another source of revenue which would likely come in the form of a drastic tax increase.

Removing Connecticut’s income tax from consideration would instantly create a $9 billion hole in a $19 billion budget.

Lamont’s proposal is far more modest, but it comes with its own financial shortfalls.

Whomever wins the November 6 election is going to face an estimated shortfall of $5 billion when they enter office in January.

Both candidates have proposed both extreme and moderate revenue cuts, but the result of each is similar: they would make a difficult budget year even worse by having less revenue to cover operating expenses.

Lamont’s property tax credit would cost the state about $165 million in revenues, but estimates he could make up for that, and then some, with three measures: finding savings in the Department of Correction, doing a better job of collecting all tax revenue, and instituting sports betting with regulations that benefit Connecticut’s coffers.

His campaign estimates those savings and revenues could collect as much as $375 million, enough to fill the hole created by the property tax credit.

However, those are estimates, and the Department of Correction’s budget has either been cut or remained flat for each of the past few years as the number of inmates in the state’s prisons has decreased.

Saying the Connecticut Department of Revenue Services needs to do a better job of collecting taxes is also a noble and common-sense demand, but Lamont does not provide an idea to make that happen.

Finally, on sports betting, Republicans refused to negotiate and provide votes for Gov. Dannel Malloy over the summer to get the program moving as quickly as possible. Any plan would need to be approved by the General Assembly, and since Democratic leaders have already said they would need Republican votes to approve any sports wagering legislation, it may be premature to assume Republicans would be more eager to deal with Lamont than Malloy.

Simply put, this tax credit proposal perhaps comes as far more realistic than Stefanowski’s but comes with its own pitfalls.

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