Fasano: No tax break for the middle class [Record Journal]

June 15, 2015

Record Journal Op-ed by Len Fasano

The budget narrowly passed by the General Assembly is not a tax break for the middle class. Rather it is a damaging tax hike, that’s the plain truth. It also relies on two dangerous falsehoods: (1) more money will always fix a problem, and (2) whoever is in charge knows all and knows best.

Throwing money at a problem does not always solve it. Clearly, that philosophy didn’t work four years ago when we saw the largest tax increase in state history. Despite all that new revenue, we are no better off today than we were then. Locking out those who think differently is also no way to promote change. By barring Republicans from budget negotiations, Democrats allowed history to repeat itself. Instead of breaking the cycle of single party rule, those in power closed their eyes to new ideas. They allowed the wheel to keep turning with no interruption to shift direction.

The end result was a budget that sets us back, not forward. Some lawmakers, albeit few, have celebrated this budget saying it protects the middle class, provides property tax relief, and will significantly improve transportation. But this rhetoric just doesn’t add up. In reality, this budget targets the middle class just as much as it targets the wealthy.

  • It repeals the scheduled sales tax exemption for clothing/footwear under $50 and limits the sales tax holiday, imposing a $280 million tax hike on children’s clothing and family necessities.
  • It reduces the Property Tax Credit from $300 to $200 — 66 percent of those who currently utilize the credit have annual incomes less than $75,000.
  • It delays the scheduled increase in the personal exemption for single filers — 90 percent of which have incomes of $75,000 or less.
  • It raises taxes on hospitals and adds a new tax to ambulatory surgical centers, which will result in higher health care costs for patients.
  • It reduces Medicaid Provider Rates significantly, likely resulting in a decrease in primary doctors that accept Medicaid coverage.
  • It imposes $700 million in tax hikes on businesses that will have a trickle-down effect, impacting small companies that do business with larger corporations and will have a devastating impact on jobs at all income levels.
  • It implements painful cuts by reducing funding for burials for the very poor, closing down new entries into the state’s senior home care program, cutting from the veterans’ honor guard, and cutting from the resident state trooper program hurting small towns.

The budget also does not guarantee property tax relief for all. By requiring the state to disperse a percentage of revenue collected from the sales tax to towns, we are putting a great deal of faith into a system that constantly challenges our trust. For example, to close the current year’s deficit, this budget proposes reducing aid promised to municipalities by $12.7 million. When money promised is often denied, how can we be sure new funding will be any different? This plan also doesn’t guarantee specific relief for most, just more money for some large city governments — where funds could be misused in the process before they reach our communities directly.

Finally, while the governor has touted this budget as the cure-all to resolve Connecticut’s transportation issues, it’s hard to ignore that this plan actually underfunds the state’s transportation fund by $32 million next year through money diversions. Remember that fund that was supposed to be protected by a ‘lockbox’? Apparently the lock will be easy to pick. In all, the transportation portion of the budget would only fund transportation by a meager $65 million over 2 years, a modest amount compared to the $370 million being raided for non-transportation projects. No matter how you spin it, this is nowhere near enough to fund the governor’s $100 billion, pie-in-the-sky transportation wish list.

When are we going to change? The time to break the cycle is now, and we can start by urging the governor to veto this budget. By working together, we can change the system, we can change the structure, we can change the solution – but we have to reject the falsehoods, and recognize the truth, before we can move forward.