Thursday, February 09, 2006
The State of Spending
“Be bold, be bold, but not too bold, lest the marrow of your bones run cold” – Mr. Fox, from A Book of English Fairy Tales
“Rell Calls For Boldness,” the headline screamed. As if anticipating the governor’s bold measures, an exuberant Jim Amann, the Democrat Speaker of the House, pre-announced a Democrat spending plan – That is what a budget is – that was, well … bold as bold can be.
Amann put his finger on what he considers to be the solution to one of the problems mentioned in several reports that had analyzed Connecticut’s anemic economy -- traffic problems. The Speaker proposed to spend an immodest $6.2 billion to fund road, rail, bus and highway improvements, especially along that nettlesome stretch of road – I 94, better known as the Fairfield County clot -- that runs from Bridgeport through the state’s “Gold Coast” and into New York.
In days of yore, Former Gov. William O’Neill rammed through the legislature a $6.5 billion plan following the collapse of the Mianus River Bridge in Greenwich. Amann has invited everyone in the state to be at least as courageous. True, the Speaker’s budget is more than twice as large as the last pre-income tax O’Neill budget, but who’s counting dollars?
"If we cannot do what Gov. O'Neill did, then shame on us," said the Speaker. The measly $1.3 billion plan produced by the legislature last year, Amann said, was the result of timid legislators who were fearful of the reaction to such a plan as he was proposing. “You know what?” said the Speaker, “Let me tell you here. Throw me out of office. Throw me out of office if the idea of [spending the amount he proposed] to resolve our transportation problem is a bad idea."
Across the state, heads are nodding, and people are vowing, “Okay Jim. Will do.”
Rell’s more modest proposal, Amann said, “is chicken feed for the over all problem we have.” Rell’s predecessor, Rowland the felonious Republican, “basically didn’t want to do squat,” but Amman magnanimously gave Rell credit for “starting a dialogue.” Whenever Democrats have in the past started dialogues with Republican governors, the chat has proven to be expensive for people who, having contributed to a government that has gobbled up twice the amount of money spent by the legislature during the golden days of Bill O’Neill, are now feeling the pinch. Not that anyone is counting dollars, but the last pre-income tax O’Neill budget was $7.5 billion, which is nearly the amount Amann and the Democrats propose to spend on transport systems in the next ten years.
In her budget address, Rell extended a hand of friendship to those penny pinchers in her party who see a connection between high taxes and the reluctance of businesses to locate in a state that has become top-heavy with rapacious legislators – an actual tax cut. Previous governors, including Rowland, have been content with tax rebates. Shoppers in Connecticut shrewd enough to understand the difference between real price cuts in goods and a fake sale that promises rebates will understand the difference between the two. Unsurprisingly, businesses considering moving in or out of state likewise understand the difference between tax rebates and tax cuts. A state that cuts taxes is serious about controlling spending. Not only has Rell proposed a gradual phase out of the estate tax; boldly going where no man has gone before, she has proposed to eliminate the property tax on cars, which pretty much caused state legislators, the majority of whom are Democrats, to gag on their silver spoons.
Much of the choking is purely political. Democrats live in the hope they will be able to persuade pinched taxpayers that they are the party of tax relief. Their pitch has centered on property tax relief. The state government is supposed to relieve hard pressed taxpayers of a portion of their property burden by assuming a larger portion of tax payments for education. The shift in a small percentage of payments from municipal to state government will provide real relief only under certain conditions: The municipalities must reduce property taxes by a commensurate amount; taxes spent by municipalities for other purposes must not increase; and the shift in payments from municipalities to state government must be accompanied by progressive rates that shift payments from the middle class to, as progressive Democrats might put it, those who can more fairly pay the tax. That would be the millionaires.
These conditions have not been met in any so called “tax reform” plan proposed by Democrats. Rell’s plan – the elimination of property taxes on cars – provides real property tax relief and defangs property tax reformers. It is a simple plan, easily understood. The good life is the simple life, said Henry David Thoreau, on whose battle standard was emblazoned the motto, “Simplify, simplify!”