State Senate President Martin Looney is not joining the Democratic Party establishment’s Hillary Clinton stampede. At least not yet.
Looney, who lives in New Haven, said Monday afternoon that he has not yet decided whom to endorse in the upcoming April 26 Connecticut Democratic presidential primary pitting former Secretary of State and U.S. Sen. Hillary Clinton against U.S. Sen. Bernie Sanders.
From the governor to the state’s two U.S. senators to New Haven Mayor Toni Harp, party leaders have lined up behind Clinton.
Asked Monday at an unrelated press conference about his choice, Looney said he has yet to make an endorsement. If he does endorse, he’ll do so by the primary, he said.
He proceeded to praise Clinton’s “extraordinary resume” —and then went on at length about the virtues of the Sanders insurgency.
Looney, who has supported income-inequality fights in the state legislature ranging from the creation of an earned income tax credit (EITC) to raising tax rates on the wealthy, singled out Sanders’ emphasis on the widening gap between rich and poor.
“Sen. Sanders is obviously offering a message that resonates greatly with the people. “[With] his really intense focus on the disparity between the very rich and everyone else ‚” Looney said, “he is engendering a lot of support and interest on that.”
Looney said he’ll be comfortable supporting whichever candidate emerges as the party’s nominee in November. “Sen. Clinton’s experience recommends her,” he said, then returned to how “Sen. Sanders has the economic message that is really inspiring people in this campaign.” Click on the video at the top of the story to watch Looney’s full answer.
While Clinton has gathered most Democratic elected officials’ support in the state, two other New Haven state legislators, Sen. Gary Winfield and Rep. Robyn Porter, have lined up behind Sanders.
Thanks, So Far
Paul Bass Photo
Harp with Looney at City Hall Monday afternoon.
Looney was asked about the race after holding a City Hall press conference with Mayor Toni Harp. Harp invited Looney there to formally thank him and the rest of the New Haven delegation for staving off an expected $1.7 million last-minute cut in state aid to the city for the fiscal year ending June 30. Looney and co. prevailed in shielding urban aid as the legislature made cuts to close a $220 million budget gap.
Whether Looney will return for another thank-you press conference in May is a bigger question. The state faces a far bigger projected deficit — some $900 million — for the fiscal year beginning July 1. No tax increases are on the table, leaving possible state worker layoffs or givebacks and deep budget cuts as the remaining options.
New Haven is counting on a promised $15 million in additional Payments in Lieu of Taxes (aka “PILOT”) reimbursements for tax-exempt properties. Looney vowed to renew the fight to preserve that commitment in the rough budget negotiations running through to the May 4 adjournment of this legislative session.
Looney said that unintended consequences of two legislative campaigns against income inequality may have contributed to the volatility of Connecticut’s revenues, which underlie the budget crisis.
State income tax revenues have consistently come in far below projections, requiring ongoing emergency cuts. When the state instituted the income tax more than two decades ago, income taxes were viewed as steady, predictable sources of revenue. That has changed in part, Looney said, because the state has since made the tax system more progressive — relying more and more on Wall Street investors and financial execs who live in Fairfield County. When the market has a downturn, those people claim far fewer gains and thus pay less in tax. And their year-to-year income swings wildly based on sometimes a small number of million- or billion-dollar deals. Meanwhile, thanks to the EITC and other exemptions, people earning less than $40,000 in Connecticut generally pay no state income tax, Looney said.
A second reason for the state’s lower-than-expected tax revenues lies in changes brought by the Dodd-Frank federal reforms of the financial industry, which led to smaller (taxable) executive bonuses, Looney posited.
While people earning less than $40,000 might pay no state income tax, they pay large amounts to state and local governments in the form of sales taxes, property taxes (as homeowners or renters), and other taxes and fees.
As is the case in other states, poor families in CT pay a much greater percentage of their overall income in state and local taxes (about 24%) than the middle class do (about 13%) or very wealthy (about 6%) do.
"Taxes that DRS collects account for $10.1 billion of the overall incidence. The Property Tax, which is collected by municipalities, has the largest tax impact on Connecticut households. The Property Tax's $7.3 billion impact equates to almost 42% of the entire tax incidence. The Personal Income Tax accounts for one-third of the tax incidence, Sales and Use is almost 15% and Excise Taxes are 4%. Together, these tax categories account for 94% of the overall incidence of Connecticut taxes in Connecticut. The remaining six percent of tax incidence is from the Corporation Business, Gross Earnings, Insurance, Gift and Estate, and Real Estate Conveyance Taxes. Overall, the Corporation Business tax represents only about one percent of the total tax incidence. "
http://www.ct.gov/drs/lib/drs/DRSTaxIncidenceReport2014.pdf
Evening this out, by even just a little, could easily balance the state budget.