‘From the Capitol’ Haven’t we learned from past mistakes?

February 28, 2011

Year after year the people of Connecticut face higher costs to live and work in Connecticut. While our state should be seeing increases in employment and prosperity, we instead have seen increases in the size of government, taxation, surcharges and spending.

In the early 1990’s Connecticut was in similar economic crisis, and to cover that deficit the state imposed the income tax. Now, two decades later, our newly elected Governor seeks to close our state’s $6.1 billion deficit through new and increased taxes on everything. History would point out that the inception of the income tax served only to put the state back to square one. Governor Malloy however, does not look to our recent past and has proposed $1.5 billion in new taxes on Connecticut families and businesses to balance the state’s budget.

While I understand and agree that erasing the state’s deficit must be a shared sacrifice, the governor’s plan squarely targets middle class taxpayers and working families. Governor Malloy’s budget calls for raising the income tax, sales tax, gas tax and everything in between – harming families, costing the state jobs and sending the message that our government is not responsible or accountable.

Many have asked how these increases affect our daily lives. Well, they equate to taxes on the Tylenol we buy, taxes on our families’ haircuts, taxes on the weekend car wash stop, and more taxes on the gas we use driving to work. The governor even wants to tax our August back-to-school shopping trip. If you clip coupons to save money at the grocery store, you would now be taxed on the original amount of the item(s) before the discount is given. And, if his plan to eliminate the $500 property tax credit is passed, more than 900,000 taxpayers will feel an even larger burden each April.

Our state’s businesses and employers would also fall subject to heavy taxation under Malloy’s budget proposal. These increases are severe enough that governors from neighboring states have made comments welcoming Connecticut’s businesses and suffering industries. In fact, the New York Post has called Governor Malloy “Connecticut’s gift to New York.”

Governor Malloy’s plan to institute rules like the ‘throw back tax’ fly directly against efforts to grow and stabilize the economy. Under this rule, a corporation with facilities in Connecticut that earns income that is not taxed in any other state will now have that income ‘thrown back’ to the State of Connecticut where it will be taxed. While this rule has the potential to raise $20 million, it will give businesses another strong reason to leave the state and drive up our unemployment rate.

When we discuss shared sacrifice in relation to the state’s budget, it should be under the pretense that state government will also contribute to offsetting the deficit. Meaningful cuts to state spending, reductions in state-worker’s benefits, and a smaller right-sized state government can all achieve this. The governor’s budget is instead asking Connecticut taxpayers to spend $19.7 billion in FY 2012, $372 million more than FY 2011, and over $20 billion in FY 2013. This type of increase only proves the state’s addiction to spending.

As the legislature moves forward with Governor Malloy’s budget recommendations, I hope that our state’s recent history is part of the discussion. We can’t afford to balance the state’s budget through taxation and we certainly can’t afford to repeat past mistakes. As I stated before, Connecticut has a spending problem, not a revenue problem. Until we address the real root of this economic crisis, Connecticut will remain insolvent.