State Comptroller Kevin Lembo says while plans to use any budget surplus for tax cuts may be well-intentioned, it’s not a good idea to be spending surplus funds until the states revenue situation is stabilized.
There has been a raging debate at the state Capitol lately as to whether there is even is a surplus at all. This week both the Malloy administration’s office of policy and (OPM) and the legislature’s nonpartisan office of fiscal analysis (OFA) pegged the surplus at more than $500 million.
Republican candidate for governor Tom Foley has called it a “phony, election year surplus” while state House Minority Leader Larry Cafero acknowledges there is a surplus and wants to use some of it for tax cuts.
Cafero says he wants to use surplus funds to restore the $50 tax exemption on clothing and footwear and the tax exemption on over-the-counter drugs. He would also eliminate the special assessment businesses pay to the unemployment fund. That comes to about $247 million.
Not so fast, says Lembo. “It would be a disservice to us all to be spending surplus funds until we’ve reached a stable revenue picture. There will be time to reexamine the tax code at some point but it’s too unpredictable right now,” he said.
Battles over any budget surplus will be tinged with politics more so than usual in the upcoming session of General Assembly which begins February 5th because it’s an election year. State Senate Minority Leader John McKinney is seeking the Republican nomination for governor along with Foley.