GOP Tax Cuts Helped Bring a Revenue Surge to CT. Now Dems Want to Spend It.April 20, 2018
Connecticut is doing about $900 million better than expected on revenue this year. That could be used to close future deficits. Instead, some Democrats want to spend the money.
The state of Connecticut is experiencing a tax revenue surge in 2018, with The CT Mirror noting on Thursday that “revenues from a key portion of the income tax [are] now running $915 million ahead of projections this spring.”
That surge is due, in part, to GOP tax cuts passed in Washington, D.C., which Connecticut’s Democratic leaders (the governor, U.S. senators, and U.S. House members) opposed. WNPR noted in January:
Malloy told a Monday news conference that while he welcomes the additional revenue, some of the money may reflect people paying taxes early before the recent changes in the Republican overhaul.
Another significant boost may have come from hedge fund managers repatriating profits held overseas, something they were required to do before a federal deadline at the end of 2017.
To put that $915 million in perspective, that’s more than four times the amount of Connecticut’s current fiscal year (FY) 2018 deficit of $197.7 million.
Now, the Mirror‘s budget reporter Keith Phaneuf said, that revenue surge is “supposed to remain in fiscal limbo until September … at which point they are deposited into the emergency budget reserve.”
But Speaker Joe Aresimowicz (D-Berlin) said Thursday the surge could help preserve “crucial programs.”
Read: the Democratic leader of the House wants to take a temporary surge in income tax receipts, and spend it on programs that need to be funded year after year.
A nearly-$1 billion deposit into the ‘rainy day fund’ would leave Connecticut in a better position to close annual deficits going forward. If leading Democrats get their way, though, the money will vanish into spending on various programs.
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