Supply-side economics may have failed in Kansas, but it’s alive in Connecticut.
Bob Stefanowski, the Republican candidate for governor and a former top executive at General Electric Co. and UBS AG’s investment bank, is promising to revive the third-worst performing U.S. state economy with tax cuts. Lots of them.
He wants to get rid of the state’s personal-income tax over eight years, eliminating the revenue that covers almost half of Connecticut’s annual general-fund budget. He wants to lower taxes on corporations and do away with the gift and estate tax, too.
The upshot? He says wealthy residents would stop fleeing to Florida and corporations would move to Connecticut instead of out, like General Electric. A state that’s struggled to create jobs would have plenty of them, he contends. “This state is screaming for a different tax policy," Stefanowski said in a phone interview.
In the race to succeed Dannel P. Malloy, a two-term Democrat who isn’t running for reelection, the economy and taxes have emerged as the two top issues -- for good reason. While the U.S. is in the midst of the second longest expansion in history, it’s largely passed by Connecticut, whose economy has contracted every year but one since the end of the recession. The state added just 14,700 private-sector jobs since 2008. And the government is facing a $4.5 billion deficit in the next two-year budget cycle, despite income-tax increases enacted by Malloy in 2011 and 2015.
Stefanowski has said electing his Democratic opponent, Greenwich businessman Ned Lamont, will bring higher taxes and more spending. But Lamont has distanced himself from the governor, whose approval rating is just 23 percent, by criticizing his management of the budget and casting himself as a business-friendly candidate. At the same time, President Donald Trump may be creating some headwinds for Stefanowski’s campaign.
Tump’s unpopularity with Connecticut voters, particularly women, is benefiting Lamont more than Malloy’s unpopularity is harming him, according to an Oct. 10 Quinnipiac University poll. It found that Lamont had an 8 percentage-point led over his Republican rival, bolstered by a 22 percentage-point margin among women. Independent candidate Oz Griebel had 11 percent.
“You’d think this would be a slam-dunk for Republicans, but it’s not shaping up that way," said Lesley DeNardis, an associate professor of government at Sacred Heart University in Fairfield, Connecticut.
Stefanowski says internal polling shows him tied with Lamont. The Cook Political Report rates the race a tossup.
Stefanowski wants to turn back the clock before 1991, when Connecticut adopted an income tax and the spending it supports. His economic plan is co-authored by supply-side guru Arthur Laffer, who also advised former Kansas Republican Governor Sam Brownback.