Friday, Governor Dannel Malloy announced a two-year plan to provide modest, targeted tax relief for Connecticut families totaling nearly $450 million.
“As our state economy continues to improve, we need to make sure that everyone shares in our emerging recovery,” Governor Malloy said. “The package I am proposing is not a panacea, but rather a modest, responsible way to begin reducing the tax burden on Connecticut residents. It’s my belief that as our economy continues to recover, it can and should be the first step toward larger relief over the long-term.”
The governor's plan build on his sales and tax refund announcement yesterday. That plan would bolster the rainy day fund, make a substantial payment on long term debt, and provide modest tax relief for residents. The governor's plan is to lay a foundation for a balanced budget in the future.
Under a scenario in which revenues grow at the same rate that they did in the last decade, and in which state spending maintains the low growth rate of the last four years, the state will have a surplus greater than $1 billion by 2018.
The scenarios in the chart below show that if spending remains controlled in the coming years as it has been under the four most recent state budgets, and revenue grows at even the slow pace of recent years, Connecticut will be able to continue to balance its budget and even cut taxes further: