Hartford Business Journal

18 Hartford Business Journal • October 15, 2018 • www.HartfordBusiness.com By Matt Pilon mpilon@hartfordbusiness.com A s far as campaign promis- es go, Republican guber- natorial candidate Robert V. "Bob" Stefanowski's pledge to repeal Connecti- cut's personal income tax over the next eight years is, objectively, a doozy. The tax, enacted in 1991, is the state's largest single revenue source, bringing in approximately $10 billion last fiscal year — about half of the general operating budget. In addition, Stefanowski's nearer- term promises to repeal the corporate income, business entity and gift/estate taxes could eliminate another $1 bil- lion a year from the state's coffers. The Madison resident and former corporate executive says the tax cuts would give Connecticut a competitive edge it hasn't enjoyed in decades, and fuel an economic boom that would boost Connecticut's remaining tax revenues — particularly sales taxes — as companies and skilled workers flock to the state, which is faced with a stagnant and aging population. "I do fundamentally believe a lower tax rate drives more tax revenue," Stefanowski said in a recent interview with the Hartford Business Journal. Stefanowski's tax plan, endorsed by Reagan-era supply-side economist Art Laffer, has its naysayers, including Democratic candidate Ned Lamont, who argues it would mainly benefit Con- necticut's wealthy residents (who pay a higher income tax rate) at the cost of decimating funding for education, trans- portation and municipalities, eventually leading to steep local property tax hikes. Stefanowski, 56, wants voters to link Lamont's policies to those of the unpop- ular Gov. Dannel P. Malloy and he's bank- ing on voters being tired of the state's economic direction and tax burden. He said the income tax over the last few decades led to a loss of fiscal discipline in state government, leav- ing taxpayers with higher unfunded liabilities and more debt. However, Stefanowski's also aware no governor can unilaterally slash taxes. That means a Republican-con- trolled House and Senate may be the only way for his vision of a more tax- friendly state to become reality. Slashing taxes Several states' recent efforts to enact income-tax relief suggest that achiev- ing significant downward movement in rates will be difficult and that promised growth may not occur. In 2012, Kansas lawmakers passed an income tax cut for individuals and some businesses, championed by for- mer Gov. Sam Brownback, a Republi- can who was also advised by Laffer. The cuts did not lead to the kind of economic growth and job creation Brownback promised, and increased the state's deficit, forcing spending cuts. A Republican-controlled legisla- ture repealed many of the tax cuts last year, overriding a Brownback veto. In Massachusetts, voters in 2000 overwhelmingly approved a ballot ini- tiative that required the state to lower its income tax rate from 5.85 percent to 5 percent within three years. How- ever, that comparatively modest de- crease has still not been fully achieved today, 18 years later. Bay State lawmakers froze the tax rate at 5.3 percent in 2003, where it remained for a decade, as the state fell short of built-in, revenue-growth trig- gers and was hit by a recession. Mas- sachusetts residents this year paid a 5.1 percent rate on their 2017 income. Stefanowski said he's confident Robert V. "Bob" Stefanowski Party: Republican Most recent job: CEO, DFC Global Corp. Other past significant jobs: CFO, UBS Investment Bank; chairman and managing partner, 3i Private Equity Group; Division CEO, General Electric Age: 56 Town of residence: Madison College education: Bachelor's degree, Fairfield University; MBA, Cornell University Running mate: State Sen. Joseph Markley Governor's Race 2018 Republican candidate Stefanowski makes big bet on massive tax cut HBJ PHOTOS | BILL MORGAN Republican Bob Stefanowski knows that some people think his vision for eliminating the state's $10 billion personal income tax is a pipe dream. The former corporate executive insists it isn't.

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