Malloy’s Proposed Budget

Posted on February 15, 2011. Filed under: Uncategorized |

One day before Governor Malloy’s budget proposal was slated to be presented, we have a pretty good glimpse into his master plan.

Taxes:

No big surprise here; taxes will be going up. If Malloy’s budget is approved, a number of tax exemptions (including yoga, massages, and haircuts) will be going away, as will the $500 property tax credit and every parent’s favorite back-to-school shopping week, August’s sales tax-free week.

The sales tax will be creeping up from 6 percent to 6.25 percent and cigarette, alcohol, and gasoline taxes will be going up.

Malloy also proposed an increase in income tax rates, with eight income tax rates classes instead of three. The highest income tax rate would be 6.7 percent.

Here’s what these changes look like for the state:

Spending:

There’s a bit more mystery on the spending side; essentially, all we know thus far is that Malloy’s looking to save $2 billion over the next two years. Malloy is reportedly looking for $1 billion in savings from the state employees and $800 million in spending cuts in the next year.

According to the Norwich Bulletin, Malloy seems to recognize that the tone has to be set at the top and, like we’ve been saying all along, this is going to hurt everyone. He’s not looking to win any popularity contests:

Malloy described his budget not as a two-year budget, but rather a “turning the corner budget” to put Connecticut back on solid financial footing for the future.

How lawmakers will react to his proposals once the full plan is presented and all the details come to light is the unknown.

“If I were them,” Malloy said, “I’d pass it as it is, and then point the finger of blame at me. I think what this does is take the pressure off of them to make the tough decisions.”

What do you think?

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[…] This post was mentioned on Twitter by CT Society of CPAs and Michael Maksymiw, Jr, CT Society of CPAs. CT Society of CPAs said: Malloy's Proposed Budget http://wp.me/p127tB-4f […]


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