Prompted by complaints from property taxpayers and Democratic legislators, Gov. Dannel Malloy changed one of his key tax proposals Thursday and now favors a maximum property tax credit of $300.
Malloy had originally proposed eliminating the popular $500 credit, which thousands of taxpayers are currently taking as they fill out their 2010 state taxes before the April 18 deadline.
Malloy, though, is now calling for restoring $300 of the credit. As such, it would still be a cut of $200 from the current level for middle-class homeowners.
The overall change amounts to increased taxes for the wealthy and a reduced impact for the middle class. Taxes would still go up for middle-class homeowners but not as much as previously expected when Malloy unveiled his original budget in mid-February.
Another change is that the $300 credit would completely phase out for joint filers at incomes above $130,000 per year. Currently, only those couples earning more than $192,000 per year are not eligible for the credit.
Under Malloy's new plan, a couple earning $100,000 per year would be eligible for the maximum credit - which is the same earning level as now.
The change to $300 was first reported in Thursday's Hartford Courant.
Republicans were not impressed with Malloy's change, and they said they will offer a no-tax budget as soon as next week. Both House Republican leader Larry Cafero and Senate GOP leader John McKinney said there are no Republican votes for Malloy's budget at this point. While Malloy's plan would raise $1.5 billion in taxes, the Republicans refer to it as an overall tax increase of $1.9 billion because it includes about $300 million in increased hospital taxes and new taxes that municipalities would be allowed to impose on rental cars and hotel rooms.
"We think there is no reason to get rid of the $500 property tax credit,'' McKinney said. "This was definitely a change that was done at the request of the Democratic majority in the House and Senate.''
Malloy held a news conference to say that he was making the change after holding 17 town hall meetings and hearing feedback from constituents. But Republicans weren't buying it.
"The changes today are not the result of the listening tour because the listening tour said to cut spending,'' Cafero said.
McKinney agreed, saying, "I think he had selective listening. We've heard extremely loud voices that it's time to cut spending.''