Connecticut’s legislature, and our Greenwich delegation, have returned for their “long session” when they produce a two-year budget and can consider bills on any topics. With inflation, fear of recession, surging health insurance premiums, energy costs, and more weighing down Connecticut residents, you would think legislators would be looking to bring relief to state residents. This is what Governor Lamont has said he wanted to do.
That would be a good assumption. After all, our rainy-day fund is completely funded at $3.4 billion and we have a budget surplus of just over $3 billion. Granted, our state benefited from federal COVID monies, but at the moment we are doing pretty well fiscally. That is why we were surprised by Senator Martin Looney’s recent re-introduction of the proposed “mansion tax.”
Looney, who is the president pro-tempore of the Senate and long known for progressive tax proposals, wants to establish a state-wide property tax rate of one mill ($1 for every $1,000 of assessed value) for residential property assessed at more than $1.5 million and two mills for those over $2 million. It has been reported that there are more than 5,000 properties across the state that this tax would affect, the majority of which are in Fairfield Country. Of that number the vast majority – 3,267 – are in Greenwich.
There is no way to describe Senator Looney’s progressive tax proposal as anything other than predatory legislation targeting Greenwich.
In addition to the mansion tax, he also proposed an increase in the state income tax. The highest earners, over $1 million a year for couples or $500,000 for singles, would see their state income tax rate jump from 6.99 percent to 7.49 percent. In addition, this bracket would also pay a 1-percent surcharge on capital gains.
After years of outmigration from Greenwich and across the state, to Florida and other tax friendly states, you would think Looney and other progressives would want to stem that flow. Were these bills to pass, you would undoubtedly see more people from the top tax brackets leaving the state, which only puts a greater share of the state’s revenue generation burden on those left behind.
In other words, if you continue to target Greenwich and wealthy individuals they will continue to leave and those of us who remain will be left holding the bucket. It is time for Hartford to stop using Greenwich as their ATM.
What we have not heard is anyone speaking about cost reductions, where the state can save money. Unfortunately, soaring inflation means Connecticut state government may actually be able to add up to $1 billion in new spending — or more — and still remain under the statutory spending cap.
While we are at the beginning of the current legislative session – it ends in June – these first few bills that appear to be targeting Greenwich are discouraging.
We suspect this is an attempt by Senator Looney to negotiate with Governor Lamont in a public forum over bills and budget provisions that he wants the Governor to support. Senator Looney, who was first elected to the Senate 30 years ago, has seen the effect this type of legislation has – creating an exodus of corporations and high net worth individuals. While there was an influx of people and cash into Connecticut during COVID, we would all do well to remember that the financial benefits garnered during that time are temporary and will fade if we do not remember our past mistakes. Wealthy people and corporations are also the most able to leave.
Already LEGO has announced plans to leave Connecticut with reasoning that sounds too familiar to General Electric’s official statement several years ago.
Sen. Looney’s types of bills have been raised before and defeated. In the past, Governor Lamont and our delegation to Hartford have done a good job protecting Greenwich and Connecticut. We are hopeful the delegation will be able to do so again.
