Comptroller Wyman Faults Governor for Implying Tax Cut Led to Surplus
|Contact: Bob King|
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Any implication that the state's recent budget surplus is the product of a state tax cut that took effect only weeks ago is a serious misrepresentation, State Comptroller Nancy Wyman said today in response to remarks made by Gov. Rowland at the Republican National Convention.
"If Governor Rowland is saying that the $200 million in tax cuts had anything to do with the surplus for the last fiscal year, he should check his calendar," Wyman said.
Wyman said the state's surplus of $224 million for the fiscal year that ended June 30, 1996 was due to generally improving economic and financial-market conditions. Income and property tax cuts amounting to 2 percent of state revenues did not take effect until July 1, 1996. "We have yet to see the effects of these changes," Wyman said.
"My responsibility as Comptroller is to report about the state budget and economy as it is, not as I might wish it to be," Wyman said.
The state's economic outlook is improving because the national economy is improving, Wyman said. "Credit for the state's improved fiscal condition should go to President Clinton and not to Governor Rowland. The federal deficit is at its lowest level in more than 10 years." According to Wyman, lower interest rates, not tax cuts, have created economic growth. "Lower interest rates mean lower mortgage payments, lower car payments, and lower costs for student loans," Wyman said.
Ironically, the state's surplus was created by the very income tax the Governor said he wished to cut further. "We experienced high income tax receipts largely resulting from strong capital gains," Wyman said. Should a cut to half of the capital gains tax take effect on the federal level, Connecticut could lose $50 million immediately because of how state income tax is calculated, Wyman said.
Other aspects of plans Rowland discussed would make for an unhappy fiscal situation in Connecticut, Wyman said. The state gets about 16 percent of its total revenues from federal sources, including $1 billion for Medicaid, most of which goes for care for the elderly and the disabled. Student loans and programs to aid dislocated workers could also be effected, she added. Comptroller Wyman said she does not support deep cuts in federal aid to Connecticut, which is No. 1 in federal tax payments per capita but No. 36 in federal receipts.
Wyman also said the state tax cut is so small that it's unlikely to have much of an impact on Connecticut's economy, whose gross state product is approaching $100 billion. The hypothetical working mother Rowland cited who made $30,000 would receive an annual tax cut of $1,341. While Wyman said any tax cut is valuable to the recipient, she added that it will not go far in educating a college student or buying a house.
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For Immediate Release
August 14, 1996
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