ALBANY — Next stop, Greenwich!
Even as New York lawmakers geared up to slam out-of-state hedge-fund managers with $50 million in new taxes, Connecticut Gov. Jodi Rell was rolling out the welcome mat for the super-rich executives.
“I would like to convey a very simple, yet heartfelt, message: Connecticut welcomes you!” the Republican executive declared in a letter to the New York Hedge Fund Roundtable.
“I can assure you Connecticut has been pursuing and will continue to pursue a much more enlightened approach to job creation and retention and economic development,” Rell continued.
She promised to “do anything possible” to help fund managers find prime office space and “great homes and good schools” for their families.
“I encourage you to consider the attractive options Connecticut can offer, and invite you to contact my office directly to explore the matter further.”
The letter landed just as Mayor Bloomberg was predicting the $50 million-a-year tax would help send wealthy investors fleeing across state lines. The Assembly could vote today to approve the tax, which was first proposed by Gov. Paterson in January.
“I think it’s the best thing that ever happened to Connecticut,” Bloomberg said. “I can’t imagine why every hedge fund wouldn’t pick up tomorrow and move. The first common-sense rule of taxation is, don’t tax people that can leave.”
“Hedge funds are a bunch of desks with terminals on them; they can be anyplace,” he added.
Connecticut’s tax rate tops out at 5 percent, while top earners in the Big Apple face a combined city-state tax of nearly 13 percent. Another plan to eliminate a tax credit for city residents would effectively result in a 6 percent hike for city residents who earn more than $500,000 a year.
Assembly Speaker Sheldon Silver (D-Manhattan) defended the moves as “temporary” and necessary to close an estimated $9.2 billion gap.
Meanwhile, Senate Democratic Leader John Sampson of Brooklyn made a surprise decision to send the Senate home for the July 4 weekend without voting on a $950 million “revenue” bill needed to cap off the state budget.
Failure to act on the bill was expected to have little short-term impact on the $136 billion budget, but it meant lawmakers would not collect some $4.1 million in back pay withheld since they blew the April 1 budget deadline.
Additional reporting by David Seifman and Fredric U. Dicker