Gov's budget plan 'protects against negative effects of Trump's - WFSB 3 Connecticut

Gov's budget plan 'protects against negative effects of Trump's tax law'

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Gov. Dannel Malloy unveiled his 2019 budget proposal on Monday. (WFSB) Gov. Dannel Malloy unveiled his 2019 budget proposal on Monday. (WFSB)
HARTFORD, CT (WFSB) -

Connecticut residents will soon learn more about the governor's plan to close the budget gap, which he said also protects against negative effects of the president's new tax law.

Democratic Gov. Dannel Malloy unveiled an outline of his 2019 budget proposal on Monday.

Tuesday, he released more information in which he said the plan also includes two provisions to protect Connecticut residents and employers of the federal tax law put in place by President Donald Trump and Republicans.

“The Republican tax law will hurt Connecticut residents if we don’t take immediate action,” Malloy said.  “Let’s be clear about what this backwards legislation really does. Eighty-three percent of the benefits from this law go to the top one percent, while taxes actually increase for many middle class Connecticut families. It is nothing more than a massive giveaway for the very wealthy while the middle class pick up the tab. The actions we are proposing aim to protect Connecticut residents and businesses, who are specifically targeted by this law.”

Under the new law, Malloy said hundreds of thousands of residents will see a tax increase, property values could decrease and 13 million Americans will be come uninsured.

Malloy said more than 41 percent of residents claim the state and local tax deduction, which averages $18,939. He said the law is expected to impact more than 171,000 taxpayers in the state who claim more than 10 billion in federal tax deductions.

The governor's new budget would prevent the state's small business owners from being targeted by the federal law. It would also allow cities and towns to create charitable organizations that support town services so they can continue to provide services while reducing people's federal taxes. Finally, it would allow the state to not adopt federal tax changes to avoid a general fund revenue loss.

As far as the rest of the budget goes, it's a plan he said does not raise the sales tax or tax revenue rates. However, it does raise other taxes.

More details of the proposal will be released during Malloy's State of the State address on Wednesday.

The proposal will be Malloy's last since he's not seeking reelection. He said it includes a mixture of tax increases, cuts and highway tolls.

It was unveiled two days before the General Assembly begins its new legislative session.

Malloy called for tolls by 2023 and raising the gas tax by 7 cents until that happens.

There would also be a tax on state pensions, a raise in the real estate tax and the elimination of the property tax credit.

However, the plan also includes a proposal to help cushion the impact of the federal tax bill.

Malloy is proposing expanding Connecticut’s bottle bill that he said could generate millions. The budget would impose a 25-cents-per-bottle deposit on wine and liquor.

For years Connecticut’s Bottle Bill has been adding 5 cent deposits for soda, water, and beer. Tacking on the 25 cents for liquor and wine would make Connecticut the first state in the region to do just that.

It’s those folks who don't return their bottles to get that deposit back where the state is banking on bringing in an estimated $13 million a year.

"It will cost other people, more money,” Prakash Patel, who owns One Stop Liquor in Wallingford, said. “It’s not going to work, it’s not a good plan.  I hope he doesn't do that."

Right now, it’s just a proposal and the Connecticut General Assembly, whom the governor will address in his final State of the State on Wednesday, would still need to sign off on it.

While a quarter isn't much to a consumer, Patel said he feels it would make more work for distributors and drivers, even potentially impacting his business. He added he would need to find space to store the empty wine and liquor bottles being returned.

"You can guess how much room we'd need, everyone,” Patel said. “For the small store, what are you going to do?"

Malloy said that when it comes to the state budget, there are few easy answers left for state leaders.

He said what matters most is achieving balance with realistic and responsible changes.

Stay with Channel 3 for continuing coverage of the budget situation.

Copyright 2018 WFSB (Meredith Corporation). All rights reserved.

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