Is Malloy’s proposed sales tax cut the softener, before he hits state with tolls?

Gov. Dannel P. MalloyConnecticut Republicans are caught between the proverbial rock-and-a-hard-place with Gov. Dannel P. Malloy’s proposed cut in the state sales tax. Democrats are almost in the same position. The governor sent ripples through the political community on Sunday, when he announced a proposed cut in the sales tax from 6.35 percent to 6.2 percent by November and down to 5.95 percent the following year. Now that’s a proposal any Republican could support, except it is tough medicine for any Republican to swallow, when it comes from a Democratic governor as strident as this one.

On Monday, as Malloy touted his proposal – part of his overall budget package to be revealed on Wednesday – the GOP looked for the downside, and they found it. It’s a “shell game,” they howled. In return for a sales tax reduction, the governor would eliminate the sales tax exemption on clothing purchases up to $50. Not to mention, how is the state going to close a projected $2.7 billion two-year budget deficit?

Democrats were even more perplexed. Both Senate President Martin Looney and Speaker of the House Brendan Sharkey chose the silent route, preferring to wait until after the full budget is released. To Democrats, tax cuts are like being forced to take cod liver oil.

Even more distressing to Democrats, Malloy was sounding like a Republican. Making the rounds in Middletown on Monday, the governor said the sales tax “is a broader tax and will distribute more relief and, quite frankly, distribute it more equitably to the middle class.”

In that he is correct. If a Republican governor had been making that statement, GOP legislators would have been heralding the news, while Democrats would be less respectful, howling “shell game” rather than “let’s wait until the full budget is released.”

From a consumer perspective, who wouldn’t trade a sales tax exemption on $50 for a reduced sales tax? Taken at face value, a sales tax cut could produce more revenue for the state on large ticket items like automobile purchases and the like in addition to a overall purchases of all goods subjected to the sales tax.

Forget the Democrats for just a moment. The fact is, Republicans sound like nit-pickers if they oppose the sales tax cut. Malloy’s plan is not the panacea to what ills the state, but for a Democrat to propose a cut in a major tax is big news. For Republicans to oppose it smells like “politics as usual,” during a time when the public is fed up with that game. The GOP should signal the end to “politics as usual” and support the sales tax cut, now. It may be the only thing they can support in this budget, because the betting game from this corner is that the governor’s sales tax cut is a way of softening the blow for what’s also sure to be part of his proposal, tolls on Connecticut highways. That’s where the real “shell game” will be played.

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