Fiscal Responsibility – Raising Taxes is Not the Answer

March 4, 2010

A month into the 2010 legislative session, Connecticut is still facing an overwhelming budget deficit. As elected officials, we have a fiduciary responsibility to the citizens of this state, and it is our duty to make sure taxpayer dollars are collected and allocated wisely to ensure the financial security for future generations.

The majority party still has failed to fully acknowledge the severity of Connecticut’s spending problems, as well as the more than $12 billion budget in deficit spending projected for next four fiscal years. Rather than making intelligent cuts in spending or finding ways to make government more efficient, they continue to propose new taxes on families and businesses.

For example, Democrat leaders recently proposed paradigm changing legislation that would establish a state-wide property tax. Each taxpayer would be responsible for paying additional property taxes of one to five mills, or $1 to $5 for every $1,000 in assessed property. This revenue will be collected by the state and then distributed back to municipalities on “a per capita or need-based formula.” This tax would take advantage of municipalities with higher grand lists, and towns in Fairfield County, that already contribute nearly half of total state income taxes, would be required to pay even more for services from which they will never benefit. Currently, we receive less than a percent back from our contribution to state revenues annually. This bill would only serve to intensify that inequity and drive more of Connecticut’s taxpayers and job creators out of our state. Relying on so few for so much is an unintelligent and unsustainable revenue model, and needles to say, this type of a tax mechanism is prone to severe abuse in the future.

I realize there are cities and towns in Connecticut that need more help from the state than others, but rather than reflexively looking to raise taxes, I believe it is incumbent on the General Assembly to first look at ways to reprioritize state spending, reduce waste wherever possible and enact reforms that will help grow our economy thereby creating more taxpayers. Until we rein in spending, we can not, and should not, ask people who are already coping with job loss and current tax burdens, to pay more taxes.

There is yet another bill that you may find interesting. In its endless effort to find additional revenue steams, the majority party has also proposed taxing bonuses received by employees of businesses receiving funds under the Troubled Asset Relief Program (TARP). TARP bonuses granted to individuals earning over $125,000 a year and couples earning $250,000 a year would be taxed at a rate of 90%. Even if this bill does not pass, the message it sends out is completely counterproductive.

Raising taxes is not going to bail Connecticut out of this fiscal crisis. These and other new taxes proposed by the majority party are egregious and will ultimately harm our state’s economy. Your delegation is on the case and will hopefully be able to report to you that these bills have been defeated and that, ultimately, the state is on a better track than it has been for the last several years.