Wednesday, August 26, 2009

Rell To Republicans: Go Fish

It took while for the lady to collapse.

First Gov. Jodi Rell, who had stuck to her no-tax-increase guns long after the fiscal year ended, proposed a tax increase of half a billion dollars to discharge a deficit of about $2 billion. Waiting in the wings is a much larger deficit of $9 billion. Leading Democrats in the legislature were steadfast in a) refusing to submit any budget and b) insisting upon minimal spending cuts and maximum tax increases.

At the tail end of August, Democrats, after futile private negotiations with the governor, announced that they were preparing to submit their own budget to the legislature.

Senate President Pro Tem Donald Williams, said, "We're revising our proposal.''

Speaker of the House Chris Donovan said, “We are preparing a budget.''

According to one report, “Donovan said the Democrats will be reducing the amount of the increase in the state income tax, but he declined to reveal the potential rates or the income thresholds that would be affected. The new plan will offer lower taxes and more spending cuts than the most recent Democratic plan.”

Apparently, the two worthies were not asked by reporters why they could not submit their “revised plan” before the fiscal year ended.

The following day, Rell – possibly after negotiations with her shadow governor, chief aide Lisa Moody, decided to jump in front of the freight train.

Newspapers reported that Rell was having nagging second thoughts about the budget. The lady would present a new, revised budget. These second thoughts followed close on the heels of the Democrat’s announcement they would present their own budget and go it alone.

Rell’s proposal surrendered to Democrats half a loaf. Folding on the principle she had been ardently defending – no new taxes -- Rell’s new budget plan includes a raise in the state income tax to 6.5 percent on couples earning more than $1 million per year and individuals earning more than $500,000 per year. The current maximum rate is 5 percent.

This is Rell’s version of the millionaire’s tax Democrat leaders in the House and Senate, Don Williams and Chris Donovan, have been lusting after. The increase in Rell’s revised budget, retroactive to Jan. 1, 2009, is expected to hall in more than $1 billion in the next two years. In addition, Rell is proposing to cut the sales tax back a half a percentage point to 5.5 percent. Pointing to a survey, the governor expects her proposed cut in the sales tax to produce 8,300 jobs.

"This is a huge, huge boost to our economy,'' Rell enthused.

Over in neighboring Rhode Island, the Republican governor has proposed to deal with the state's deficit by shutting down state government for 12 days.

There was no immediate indication that Democrats, who had threatened to present their own budget in the legislature, would agree to Rell’s terms of surrender.

What to make of all this?

What Rell’s new proposal really does is to cut no-tax-increase Republicans out of the negotiation loop. From this point onward, Republican opposition to any final agreement made between the governor and leaders in the legislature may be safely discounted.

Rell and Moody, sometimes praised in the media for her disposition to bargain pragmatically with the Democratic opposition, are now in the ring alone with President Pro Tem of the Senate Don Williams and Speaker of the House Chris Donovan, who used to be a union steward and is no stranger to bargaining.

The Democrats have a veto proof majority in the legislature and could, assuming the leaders were to marshal sufficient votes, override a gubernatorial veto.

It is as if, prior to the battle of The Little Big Horn, General George Custer were to dismiss his troops and attack the overwhelming force arrayed against him alone, accompanied by his chief scout and his accountant.

But here is nothing unusual in this arrangement. As Yogi Berra might say: “It’s Déjà vu all over again.” This is the third time Gov. Rell has proposed to increase taxes.

This time, it will be a take.
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