The big lie about Malloy and taxes

Quick quiz: Which governor approved the two largest tax hikes in modern Connecticut history?

If you answered Dannel P. Malloy you would be in elite company. The claim about the Democratic governor has become a mantra for Republican gubernatorial nominee Bob Stefanowski, GOP lawmakers, and conservative policy groups. (See related column.)

You also would be wrong — by any measure.

Malloy certainly shares responsibility for one of the largest increases, namely the $1.8 billion package he signed in 2011. He then was tagged with the second largest tax increase when, four years later, he signed increases worth between $670 million and $895 million.

But even the higher number is well below the mammoth-sized tax increase Gov. Lowell P. Weicker Jr. signed 27 years ago — which was worth $1.1 billion before adjusting for inflation and which prompted thousands of angry protesters to gather on the Capitol lawn.

The Connecticut Mirror looked at projections from the legislature’s nonpartisan Office of Fiscal Analysis for the first fiscal year after the enactment of tax increases. It also counted any policy change that increased taxpayers’ obligations and their projected annual impact.

Many Democratic lawmakers argued the 2015 tax hikes weren’t as severe as Republicans’ depicted because only about $670 million of the increases affected existing tax rates. Another $225 million involved canceling or deferring tax cuts that — while approved — hadn’t taken effect yet. Republicans disagreed.

These were counted as tax increases in this analysis.

The first test was a simple comparison of nominal dollars. This test has severe limitations, since it doesn’t adjust for inflation, and dramatically understates the value of the older tax hikes. But even under the first test, Malloy still doesn’t hold the top two spots. His 2011 and 2015 increases rank first and third, respectively.

The second test, which many economists use, adjusts for inflation.

Using that method, a clear separation occurs. The tax hikes approved by Weicker and by Gov. William O’Neill in 1989, as well as Malloy’s first, are far more significant than the other three largest tax increases. Malloy’s 2015 increase falls to fifth. Weicker’s increase takes the top spot, with the 2011 Malloy tax hike falling to second.

Stefanowski, whose campaign has centered on comparing Democratic gubernatorial nominee Ned Lamont with Malloy, has repeatedly accused the outgoing governor of orchestrating the two largest tax hikes in state history. When presented with the CT Mirror’s analysis, the Stefanowski campaign initially released a one-sentence, written statement. It read: “While Lowell Weicker did sign a bill creating Connecticut’s state income tax in 1991, Dan Malloy has signed into law the two largest increases of the state income tax.”

But that isn’t accurate either.

The tax package Gov. John G. Rowland signed into law in 2003 was projected to raise $516.8 million in income taxes, according to the legislature’s nonpartisan Office of Fiscal Analysis. The 2009 tax hike enacted under Gov. M. Jodi Rell cost income taxpayers $617.9 million.

The income tax portion of Malloy’s 2015 overall tax package was projected to raise $219.3 million.

If all three increases are adjusted for inflation to 2018 dollars, Malloy’s 2015 hike still ranks below both.

After being presented with this information, the Stefanowski campaign re-stated its position.

Campaign spokesman Kendall Marr said, “I can concede that they should be referred to as two of the largest tax increases instead of the two largest.”

Yet, as most of us know, if you say something often enough, people will start to believe you.

Worse yet, they’ll repeat it.

Connecticut Business and Industry Association President Joseph F. Brennan was dismayed last week to learn his organization had made the claim in a May 2017 state budget analysis sent to member businesses.

“I can’t catch every single thing that comes out of our office,” Brennan said, adding that he never believed that the 2015 tax hike ranked in the top two.

A 2016 policy paper released by the Yankee Institute, a conservative public policy group, stated: “Connecticut used to be the low-tax alternative to states like New York and Massachusetts in the Northeast. But now, especially after the two largest tax increases in the state’s history in just four short years, Connecticut’s taxes are on par or higher than all of its neighbors.”

Carol Platt-Liebau, the institute’s president, said the claim likely came from newspaper reports. She acknowledged that the “two-largest” claim could be wrong.

Platt-Liebau added, “By imposing enormous tax increases — by any measure — on the people of Connecticut when they were struggling to come out of a recession, Governor Malloy has indisputably damaged our state.”

But he didn’t sign the two biggest tax increases.

Keith M. Phaneuf is a reporter for The Connecticut Mirror (www.ctmirror.org). Copyright 2018 © The Connecticut Mirror.

 

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