How to get $3.5 billion in taxes out of the state’s treasuries

A $3 billion windfall that has been earmarked for Connecticut’s state and local governments has been frozen by the state legislature after the state lost more than $1 billion in federal taxes.

Gov.

Dannel Malloy said Tuesday he was using the extra money to offset the state budget deficit and invest in public services.

“As you can imagine, we’ve lost money,” Malloy told a news conference.

“We’ve lost the revenue that’s been generated from these tax revenues that we’ve generated through the state sales tax and the sales tax credit and the income tax.”

Malloy said the extra tax revenue would help Connecticut attract and retain talented, skilled workers.

The governor’s announcement follows the state passing a $1.3 billion tax increase last week, bringing the state total to $4.4 billion.

It will go toward a statewide sales tax hike that was expected to generate about $1 million per day.

State officials said they are also investing in education and other programs to help address the financial problems.

They said the state would spend $1,100 per person on food and $300 per person for other state services.

The state lost $3,974,000 from the federal sales tax revenue in 2018, according to Malloy’s office.

The money was redirected to state coffers.

Mallowy said the money would be spent on infrastructure and schools, and it would not be earmarked to pay for other tax increases.

He also said the funds would not go toward debt service or to pay off bonds.

Mallsaid he has not yet decided whether to sign a new budget with the governor.

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