Hartford Business Journal

www.HartfordBusiness.com • October 15, 2018 • Hartford Business Journal 19 Connecticut can fully eliminate the income tax within eight years and that it will boost the economy. He points to states with growing economies, like Florida and Texas, that have no income tax. However, Stefanowski's plan isn't steeped in blind tax cuts. In fact, his economic plan, which is co- authored by Laffer, links proposed indi- vidual and corporate income tax cuts to revenue triggers, something that hasn't been widely discussed on the campaign trail. If he holds true to that strategy, Connecticut would have to experience certain levels of tax revenue growth in order for a tax cut to kick in. It's a similar system used in other states including Massachusetts, North Carolina and Arizona, and if Connecticut doesn't experience the kind of growth Stefanowski projects will happen, it could hinder his campaign promises. Would Stefanowski consider it a success if he managed to cut taxes, but not eliminate the income tax entirely? He seems ardent in his mission. "We're going to get rid of it," he said. "It's within the realm of possibility to get a 7 percent tax gone in eight years." Stefanowski said he can be a pretty convincing leader — drawing on negotiation and influencing skills learned at his corporate roles at Gen- eral Electric, UBS Investment Bank and elsewhere. He also rebuts the idea that his tax cuts aren't achievable in a state facing billion-dollar deficits for the foreseeable future. "Before 1991, we were the fastest- growing economy in the nation," he said. "How can people tell me it's impossible to do something we've done before?" Stefanowski said voters' choice at the ballot box next month comes down to a candidate (himself) "who's going to work like heck to get taxes down, and even if you don't believe I can do it, most people that I talk to would rather have somebody who is going to try like heck … versus someone [Lamont] who has been very inconsistent on tax policy and is probably going to raise taxes." For the record, the Greenwich Democrat says he won't raise income or sales taxes. He has spoken in favor of a uniform statewide motor vehicle tax, which would result in higher taxes for some, mainly in wealthier communi- ties, but lower taxes for more people overall, he said. Lamont, who has sought to tie Stefanowski to President Trump, has also promised more than $400 million in tax relief in his first bi- ennial budget. Stefanowski still insists that Lamont will raise taxes and pursue highway tolls on Connecticut drivers. The reality is, none of the major candidates, including unaffiliated Oz Griebel, has identified in detail for voters how they would pay for any tax cuts and close a projected $4.5 billion deficit in their first two-year budget proposal, which will be released in the first few months of 2019. Tackling the deficit Stefanowski said he won't support raising the sales tax (or any other tax for that matter) and is also against highway tolls and, at least for now, legalizing and taxing recreational marijuana. He left open some room on legalizing and taxing online gambling. "I do think we're going to need to go that way, but I want to see more details on it," he said. Rather than new taxes or fees, Stefanowski said his plan will rely on spending cuts. He said he can find $1 billion a year in "waste, fraud and abuse" in his first two- year budget with the help of "zero- based budgeting," which rejects any assumption that activities funded in a previous budget will be funded in the next. Managers would be forced to "start at zero" and justify each item in their budgets, he said. He also wants to privatize the De- partment of Motor Vehicles, improve sales-tax collections, find a buyer or private partner to take on the XL Center in Hartford, and forge public- private partnerships with investors to expand Bradley International and other airports. 300 taxes In debates and interviews, Ste- fanowski has posited that the best way to solve a number of the state's problems, from transporta- tion to education, is to grow the economy. Funding educa- tion would be "a No. 1 priority" for his administra- tion, he told a debate audience at UConn late last month. "The best way to pay for education is to get the economy moving," he said. But, if Stefanowski's tax plan be- comes a reality, the state will forfeit billions of dollars in tax revenue. If his envisioned economic boom oc- curs it could boost property values and bolster municipal budgets, but through what mechanism would the state col- lect enough revenue to fill that hole? Stefanowski's answer to that ques- tion was less than clear. "We have 300 taxes in the state," he said. "So there are plenty of other sources of revenue." He has also said state government is too big, not accountable enough, and needs to reprioritize how it spends money. Here's where Stefanowski stands on a few other key issues: Minimum wage: Stefanowski does not favor increasing the state's mini- mum wage, which stands at $10.10 per hour. Some, including Lamont, are pushing to gradually increase it to $15. "You cannot put a 50 percent in- crease on small business right now, it will break their back," Stefanowski said, adding that he supports the concept of a minimum wage, and that it should perhaps be tied to inflation. "More businesses are going to leave, people are going to automate more, you're going to see that pass through right into prices the consumer is go- ing to pay." Public-sector unions: Stefanowski, like his competitors, said he intends to ask labor unions back to the nego- tiating table to voluntarily hash out modifications to the so-called SEBAC agreement, which runs through 2027 with layoff protections until 2021. Stefanowski said he may favor an early buyout in which union members re- ceive an up-front, lump-sum payment. "We need to sit down and look at SEBAC, be fair to the union employ- ees, make sure they're secure in their retirement but also figure out what we can afford to do," he said. Hartford's debt bailout: The three leading gubernatorial candidates have all criticized the legislature's guaran- tee earlier this year of more than $500 million worth of Hartford municipal debt, which helped the city avoid filing for bankruptcy. However, the deal did nothing to bring down the city's sky-high com- mercial property tax rate (74.29 mills), which will continue to stifle private- sector investment. Stefanowski said he would take "a serious look at whether there's an exit plan for Hartford or not." "I'd hate like heck to file bankruptcy for our Capital City," he said. However, he said bankruptcy "needs to be an option on the table." Corporate incentives: Stefanowski has criticized the state's First Five program, which gives forgivable loans to companies in exchange for keeping and adding jobs in the state. "I don't think it works. I think it costs you a lot more to do that than just fundamentally lowering the corporate tax, cutting regulation and creating an environment where busi- nesses want to be here," he said. Stefanowski stopped short of prom- ising to discontinue First Five, saying he needed to examine it further. He said he supports offering some form of tax incentives to keep Connecticut college graduates living and working in the state. Rather than creating new taxes or fees, Bob Stefanowski says he plans to cut spending to deal with Connecticut's budget deficit. "Before 1991, we were the fastest-growing economy in the nation. How can people tell me it's impossible to do something we've done before?" Bob Stefanowski on how eliminating the state income tax will spark growth.

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