Connecticut GOP’s Stefanowski unveils tax plan in old neighborhood

Republican gubernatorial candidate Bob Stefanowski returned to his old, hardscrabble neighborhood in New Haven on Tuesday and said his tax plan would help his former neighbors and those all across the state.

Standing outside an independent pharmacy that has been open since 1913, Stefanowski unveiled a multi-part plan that he said would kickstart a sometimes-sluggish economy as consumers are battling the highest inflation in the past four decades.

While gasoline prices have dropped sharply from their peak, many motorists say they are still too high.

Stefanowski’s plan calls for continuing the elimination of the state gasoline tax for another full year until the end of 2023. Currently, the 25-cents-per-gallon tax has been temporarily suspended by Gov. Ned Lamont and the Democratic-controlled legislature until Dec. 1. Republicans maintain that the drop will end only weeks after the election and should instead be extended.

Unlike Lamont, Stefanowski wants to eliminate the 49-cents-per-gallon diesel tax until the end of 2023. Lamont has repeatedly rejected proposed cuts in the diesel tax, saying it is paid predominantly by out-of-state truck drivers who are cutting through Connecticut on their way to Boston, New York, and beyond.

Stefanowski would also permanently reduce the state sales tax to 5.99%, down from the current rate of 6.35%. He would also eliminate the 1% sales tax surcharge on prepared foods that are sold in restaurants and supermarkets.

Since October 2019, the state has been charging the additional tax on “food for immediate consumption” on meals and certain beverages, including rotisserie chickens and pizza — either whole or by the slice. The tax is charged if a consumer buys five or fewer cookies, donuts, bagels or pastries, according to the state tax department. But purchases of six donuts or more are tax-free.

Stefanowski said that his combined plans would total $3 billion, including nearly $2 billion in tax relief. He estimates the state’s available reserves at $6 billion, including federal funds and the rainy day fund for fiscal emergencies. But Lamont and Democrats who control the legislature have repeatedly said that the rainy day fund of $3.3 billion should remain untouched because it will be needed when the next recession hits and state revenues come tumbling down. Any additional money, they said, should be used to pay down the state’s pension debt that accumulated for decades after previous governors and legislators repeatedly failed to contribute enough money to the cash-starved pension funds.

The surpluses have been generated mainly through billions in federal funds during the coronavirus pandemic and large capital gains on Wall Street that were collected before the stock market started falling this year.

“It’s wrong to keep that money up there [in Hartford] while people are struggling,’' Stefanowski said on the sidewalk along Dixwell Avenue. “We’re going to give it back to the people of Connecticut, where it is deserved. ... We’re going to give it back to the people who need it.’'

But Lamont’s campaign spokesman, Jake Lewis, dismissed the tax proposal, which would require approval by the Democratic-controlled legislature.

“Bob has spent years detailing his economic plans that would slash money from our schools, hospitals, and resources for our seniors,’' Lewis said. “His priorities are so extreme he once said he wanted to “rip the guts” out of the state budget. Governor Lamont returned our state to fiscal sanity and balanced budgets through responsible management — all while delivering the largest tax cut in state history and paying down debt, saving future generations hundreds of millions of dollars.”

State Rep. Sean Scanlon, a Democrat who is running for state comptroller, noted that all Republicans in the legislature voted this year against Lamont’s tax-cutting proposals that have been enacted into law.

“Bob chided Governor Lamont for delivering the child tax credit, suspending the gas tax, making public transportation free, and establishing the highest earned income tax credit in Connecticut’s history,’' Scanlon said. “Now, he’s making promises he can’t keep to avoid proposing a real plan.”

In addition, Stefanowski says he would stop collecting 200 different taxes and fees that generate just 0.22% of state revenues - adding that the state is currently wasting time and energy in collecting small fees that generate about $50 million in a massive state budget of $24.2 billion annually.

Responding to changes by the federal government under then-President Donald J. Trump, Stefanowski would allow taxpayers to deduct as much as $10,000 for property taxes on their state income tax. The money would be deducted from their taxable income — meaning the actual savings would be about $600 in fewer taxes paid.

The reason, he said, is the federal limit on state and local taxes — known as the SALT deduction that is now capped at $10,000 per couple. The legislature’s nonpartisan fiscal office says that the biggest beneficiaries of the SALT deduction in the past have been the richest residents because they pay the highest property taxes that often exceed $10,000 per year. As a result, they have been the most impacted, officials said.

Among those earning more than $1 million per year, the deductions are among the highest in the nation, at nearly $330,000, the office said. Taxpayers earning between $75,000 and $100,000 per year would pay additional taxes, on average, of only $19 per year, the research office said.

Lamont’s tax cuts of nearly $650 million include increasing the property tax credit to a maximum of $300 per tax filer, up from the previous $200. The credit is effective for the 2022 calendar year and can be received when residents file their taxes before April 15, 2023.

The cuts also include reducing car taxes for about 75 of the state’s 169 municipalities. Communities with low mill rates, such as Greenwich and New Canaan, would see no reductions in car taxes.

The legislature and Lamont also enacted a child tax credit of $250 per child for a maximum of three children — meaning a reduction of $750 for the year from the state income tax. The credit is designed to help 600,000 children who are currently claimed as dependents on state tax returns. Single parents earning up to $100,000 and couples earning up to $200,000 per year are eligible for the temporary credit, which lasts for only one year.

Christopher Keating can be reached at ckeating@courant.com