Record Journal Editorial: State budget is no solution

Record Journal

“If you drive a car, I’ll tax the street. If you try to sit, I’ll tax your seat. If you get too cold, I’ll tax the heat. If you take a walk, I’ll tax your feet.”

Back when George Harrison wrote those lines, the newly wealthy Beatles were suddenly facing income tax rates that could actually exceed 95 percent — literally “one for you, nineteen for me.”

While the tax situation here in Connecticut is nowhere near as bad as it was in Britain in the 1960s, the budget just hammered out by the General Assembly discovers so many items, here and there, to tax that it almost seems to have been inspired by “Taxman.”

Those new or increased levies include:

• Higher income taxes on the middle class as well as the wealthy.
• Reducing the deduction you can take for the property tax on your home.
• Keeping a 20 percent surcharge on the corporation tax, a surcharge that was supposed to expire. (There seemed to be at least a chance, after the budget passed, that Gov. Dannel Malloy would find a way to mollify big business, which had made unprecedented statements critical of the budget, on this issue.)
• Tripling the sales tax rate on data processing services, which will greatly affect one of the state’s flagship industries, insurance.
• Major tax increases on hospitals, which will pay an extra $247 million per year.
• New levies on ambulatory service centers.
• Canceling the promised restoration of the sales tax exemption on clothing and footwear costing less than $50. This will cost shoppers almost $280 million over two years.
• A new tax on non-coin-operated car washes and non-metered parking.
• Increasing the cigarette tax to $3.90 per pack.
• Introducing keno in restaurants and bars, which may bring in more than $40 million over two years.

Those last two items are especially troubling. Although health agencies say that every tax hike on cigarettes forces some people to quit, those who won’t or can’t give it up are disproportionately low-income people, and they’re already paying almost $10 per pack. But despite the tax increase on cigarettes, the state plans to spend nothing at all on smoking cessation services.

Keno, too, can be seen as a regressive tax, one that hits the poor hardest, a fact that people perhaps prefer not to think about.

And the tax on ambulatory service centers reminds us that this budget already cuts all kinds of health and social services for seniors, poor families and people with developmental disabilities, although the cuts are less draconian than those originally proposed by Malloy.

But it’s hard to imagine that a new tax on car washes will contribute much to the state’s bottom line, and we have to assume that the hospitals will simply recoup that additional $247 million annual tax liability from their patients, and then everybody’s health insurance premiums will go up.

At least the tax on kitchen sinks won’t increase.

But despite all the pain in this two-year, $40 billion budget, following the big tax hikes of four years ago, it is projected that the state will still be deep in red ink two years from now, without having made a dent in the governor’s aggressive, $100 billion master plan to revamp transportation in the state. And it will take a special session to do anything about his “second chance society” and to clean up other business.

As usual in our state, the legislature did its most important work of the year in the dead of night, at the last possible moment, under maximum pressure. We don’t pretend this is an easy task; on the contrary, we choose to believe that every member of the legislature is trying to do his or her best for constituents, and for the state as a whole, while also staying in good graces with the party leadership.

And this budget is not without bright spots. For example, towns and cities will be getting more state aid, especially for education. And reorganizing the way Payment In Lieu Of Taxes (PILOT) grants are calculated should bring more funding to communities such as Cheshire, which are burdened with lots of tax-exempt property.

But even with the Democrats firmly in control of the General Assembly, the budget vote this time was close: 73-70 in the House and 19-17 in the Senate. That means quite a few Democrats joined Republicans in voting against it. In our neck of the woods, the only Democrat to do so was Rep. Emil “Buddy” Altobello, of Meriden.

Senate Minority Leader Len Fasano, R-North Haven, called the budget a failure, saying that his party was shut out of the negotiations and no structural improvements were made. “If you’re not going to talk about the structure that gets us to our problem and all you’re going to do is raise taxes and not look inward, you can never solve the problem,” he told a reporter for The Connecticut Mirror.

Senate President Pro Tem Martin M. Looney, D-New Haven, countered that it is “not a budget to be defensive about” but “a responsible budget that made difficult choices. This is really a budget to celebrate.”

Maybe so, but no such celebrations seem to have broken out yet, anywhere in the state. Instead, it’s likely that much of the public will react along the lines predicted by Rep. Chris Davis, R-Ellington:

“What in the world are they doing in Hartford? They’re making it harder for me to live here in Connecticut.”