“How Will This Help?”

June 4, 2015

An excellent editorial was published in today’s Hartford Courant. I attached it for you below.

Thank you for all you have done over the past several weeks to help me try to fight these dangerous tax hikes.

Please continue to call Gov. Malloy at 860-566-4840, Senate Democrats at 800-842-1420, and House Democrats at 800-842-1902 to express your opinions on these tax hikes.

I hope my Capitol updates are helpful and I welcome your input.

I will continue fighting for you.

More Huge Tax Hikes Won’t Solve State’s Problems
Hartford Courant Editorial

Four years ago, Connecticut’s first Democratic governor in 20 years and the largely Democratic General Assembly raised taxes — the biggest tax hike in state history — to close a projected $3 billion state budget deficit.

Here we are again: Another projected $3 billion deficit, although spread over two years this time.

Another round of tax hikes pushed by Democrats.

This is a dangerous trend.

There seems to be a cause and effect here that leaders are ignoring.

How Will This Help?

After dawdling for months, the House and Senate passed a two-year, $40 billion state budget Wednesday that had a modicum of spending cuts and a lot of new tax revenue — $2 billion worth.

How this budget would get Connecticut out of its current economic doldrums is hard to see. Already, four major employers have strongly hinted at moving.

Also hard to envision is where the state will turn for help in a few years if the trend continues, as the state’s Office of Policy and Management has predicted it will.

Since the massive 2011 tax hike, Connecticut’s economy has been anemic. The recovery that the Malloy administration was planning on didn’t fully come. The current unemployment rate of 6.3 percent is now nearly a full percentage higher than the nationwide rate and the highest in New England. Connecticut’s insurance industry is still smaller than it was before the recession.

The growth in the state’s economy was negligible between 2007 and 2014, according to a JPMorgan Chase report. Yet state reports, adjusted for inflation, show the growth in state revenues was approximately 10 percent in that time — presumably by claiming a larger share of individuals’ and businesses’ earnings.

This is not the way to go.

The Sacred Cow

Connecticut needs a way out of this morass, but the budget that passed the House Wednesday doesn’t provide a clear path.

It alienates businesses by imposing new taxes and reneging on promises to end old ones.
It asks more of the middle class by lowering the property-tax exemption.

It raises taxes on the highest earners. House Majority Leader Joseph Aresimowicz quipped dismissively, “They can take a weekend off from the yacht.” Or sail away from this hostile shore.

Mr. Malloy says that he tried to cut spending, but many felt it was a cynical attempt. His budget proposal in February deeply cut services for the disabled, the poor and the elderly, as well as beloved institutions of the people, such as the Governor’s Horse Guards and money for Connecticut Honor Guard members to attend military funerals.

But the Malloy proposal didn’t touch beloved institutions of the Capitol, such as the Permanent Commission on the Status of Women and other legislative advocacy groups, the Department on Aging, or state employee benefits that Democrats insist are “fixed costs” and off-limits.

The Malloy administration says the budget choice was stark: either cut social services or raise taxes. Social services take up a significant chunk of spending, the administration says. So do the state’s personnel costs. Yet those were off the table.

“I think I’m in a position to ask more of my fellow state employees than any other governor in the nation,” Mr. Malloy said in 2011 in promising he could wrest concessions from them. He asked too little of them back then and nothing of them this time. The 2011 concessions deal fell $253 million short of promised savings.

This budget deal, like the one four years ago, increases suspicions that the Democrats in control at the Capitol would protect state employee unions at the expense of everyone else.