By Mary E. O’Leary
Both Foley and Gov. Dannel P. Malloy appeared separately Tuesday morning before the annual convention of the Connecticut Conference of Municipalities and then talked to the press.
“In the last 10 years I have paid over $10 million in taxes to the state of Connecticut and I think it is very discourteous of the governor to be … singling out a taxpayer who has paid an awful lot of money to support this state when, in fact, when I’m governor I won’t be insulting our taxpayers. I’ll will be thanking them,” Foley said.
“I think, when you run for governor of the state of Connecticut, you have an obligation to release your taxes. … The idea that you can run for governor of the state of Connecticut and not release your state income tax return is ridiculous,” Malloy said.
Malloy released copies of the first two pages of his federal and state returns, while Foley allowed reporters to view the two page summary of his federal taxes for 2010 through 2013, which showed he had an effective income tax rate of zero from 2011 through 2013.
He paid $315,563 in 2010 for an effective rate of 31 percent. His tax liability for 2011 was $1,003, for 2012 it was $815 and for 2013 it was $673.
The joint return from Malloy and his wife showed effective federal tax rates of 38.19 percent in 2010; 20.7 percent in 2011; 25.3 percent in 2012 and 25.2 percent in 2013.
The Democrats were inferring that Foley may be claiming another state as his residence, but the Republican candidate confirmed it is Connecticut, although he does pay some taxes in other states because he has businesses there.
“To some extent I am required to pay a very modest amount of taxes in those states. Virtually all of my state taxes are paid,” Foley said.
“No impropriety has been indicated,” Foley said of his tax returns.
He criticized Malloy for not providing more details on the estimated $180,000 in rental income Malloy made on his home in Stamford from Sept. 2011 to Nov. 2013 and the deductions he took.
His campaign said the deductions were for insurance, property taxes, depreciation and repairs, which from 2011-12 were higher than the rent payments, according to the Hartford Courant.
The income was $1,795 in 2013, which was the difference between the deductions and the payments and was reported on that tax return.
Lindsey Farrell of the Working Families Party, who showed up outside the convention, said Foley’s wealth is not the issue.
“It’s not about the money. It is about how he made it. Outsourcing jobs to Mexico, laying off workers, exploiting tax loopholes. These are not qualifications for governor,” Farrell said.
The Working Families Party has endorsed Malloy for governor as it did in 2010 and has an independent expenditure PAC that has raised $653,000 from various unions, mainly the Service Employees International Union. It plans to participate heavily in door-to-door canvassing for Malloy.
Farrell said, according to the 2013 federal tax table, a person who is married but does not file a joint return, which is what the Foley did, if they have taxable income above $6,700, would pay $673 in federal income tax.
A person who makes the minimum wage of $8.70 and works full time, would have income of $18,096, Farrell said. If he or she used only a personal exemption and the standard deduction, he would have taxable income of $8,096 and a tax bill of $808.
Foley said Malloy should talk about his record.
“Private sector wages, on a real basis, have declined 10 percent (since 2011.) People aren’t faring well under Governor Malloy,” Foley said ,and he called the tax issue a distraction.
“You mean I’m trying to hide the fact that 11,000 jobs were created last month or 70,000 jobs have been created over the last four years? Every month on a year to year basis we have seen job growth in the state of Connecticut. I’m not trying to hide that. He could end all this by releasing his tax return,” Malloy said.
The state would have to be experiencing a depression to have a 10 percent drop in real wages, according to an analysis by the Hartford Courant. which took issue with the claim.
Foley refused to talk about outsourcing jobs to Mexico when he closed the Trenton, Tennessee, plant in 2004 that was part of the T.B. Wood’s Sons company. His Security and Exchange Commission filing said 78 jobs were lost.
The candidate said he added 3,000 jobs to the Bibb Co. in Georgia after he bought that and employment at T.B. Woods increased threefold before he sold it in 2007 for $40 million.
“Every company I have owned grew and was more profitable, on a operating basis, when I sold it. I am very proud of my business record,” he said.
The 3,000 jobs at Bibb occurred when he purchased a separate business, the J.P. Stevens Co.. Bibb eventually went into bankruptcy and was later closed after Foley sold it. He had to lay off 500 people at Bibb when the textile industry declined in the U.S. At T.B. Wood’s, there was a strike that turned nasty when more than 200 workers were replaced.
Foley will not participate in the NBC Channel 30 gubernatorial debate Thursday night, which will go on with just Malloy and Joe Visconti, who petitioned his way onto the ballot.
This will be the second debate that included Visconti, who got 9 percent in the latest Quinnipiac Poll and expects to get more. It is unclear if his presence in the race will impact Foley or Malloy more.
Foley said they had a hard time communicating with NBC for over two weeks. He said he didn’t know what the specific issues were they couldn’t agree on.
“No chance I will change my mind,” he said Tuesday.
“Listen, I think there have been a lot of debates and frankly we are answering questions that have already been asked. I’m not sure one more debate is going to add much to voters’ information about how they are going to vote,” he said.
Malloy said “when you give your word, you honor your word,” of Foley’s promise to be on the debate.
At the convention, Foley told the gathering of municipal officials that the public feels the economic leadership is not present in the state. He reiterated his promise to cut the sales tax by one-half of one percent and impose a cap of 30 mills for the car tax with the state making up the difference to communities.
Together they would cost the state $360 million in tax revenues. He will hold spending flat, but has not said where he would cut to cover $800 million in obligations and the $360 million tax loss.
Both Malloy and Foley are looking toward a tax overhaul, which will be studied next year. They also have promised to not cut aid to cities and towns.
Foley said he will stop further mandates on towns and get state government off their backs. He was asked, if there were a deficit, would he promise to hold the towns harmless and he said he would solve it without hurting the towns.
The Republican said he would pull back mandates that don’t support good public policy. Foley did not have any specific mandates in mind.
Foley said crime rates are still too high, while Malloy has said homicides are almost at a 40-year low.
The Republican was asked if he had a plan to change the reimbursement formula for special education costs. He said he would look for ways to make it more equitable and possibly revise it.
The governor emphasized his support for the towns, covering the loss of $270 million in federal funds to increase education funding, while 600 schools have gotten security grants.
“We did not balance our budget on the back of local government,” he said to clapping from the audience.
The governor said in the nine years before he got into office, only 119 companies got government loans. Under his administration, 1,600 firms have gotten assistance, protecting 9,000 jobs with a promise to create 5,000.
As he has in the past, he brought up the deal with UTC to use $400 million in tax credits earned in prior administrations in exchange for spending $500 million building a headquarters for Pratt and Whitney and putting money into research. Malloy said it means they will be there for the next 20 to 30 years.
He said the UTC supply chain is 75,000 people in 700 companies who have been told to double their capacity and be prepared to triple their capacity.
“That’s what change looks like,” Malloy said.
On special education funding, Malloy said he is willing to work on the issue and see how the budget shapes up.
Malloy said when Foley ran in 2010 he said would cut a $3.6 billion deficit by cutting $2 billion, leaving $1.6 billion to deal with.
The governor said that would have meant drastic budget cuts and a loss of 36,000 jobs. He said towns would have been left with an average $761 hike in property taxes if he had not supported them with aid.
“We start in a better position than we would have been and we will continue to build from there,” Malloy said. He said property tax relief will not happen overnight, “but it is firmly on my mind.”
The governor said the state is in better shape on transportation with 80 projects in the pipeline and probably 115 by spring.