Tuesday, September 01, 2009
The Die Is Cast
The state Senate last night approved a budget along party lines. Voting against the budget were all 12 Republicans and 1 Democrat; 22 Democrats voted for the budget.
The $37 billion budget increases spending over a period of two years by $800 million, according to one report.
An amusing moment occurred when Democrats claimed to have cut the budget by 35%. Their “cut” refers to an accounting decrease in the current services budget. That budget projects future increases; a lower than expected increase is counted among Democrats as a “cut.” In reality, the budget increases spending by $1.8 billion.
“Don’t spend your money before you’ve got it” was sage advice offered us by our parents in our golden youths. In “cutting” the future services budget, Democrats have “saved” money they have not yet appropriated.
Over in the House, a dissenting Democrat, Rep. Linda Schofield of Simsbury, voted again the bill, along with about a dozen of her colleagues. A weary Schofield explained, “I’m tired, just like you, of being beat up for not getting a budget.” However, Schofield was uncomfortable with securitizing $1.3 billion from a yet “undefined revenue stream.” Democrats are borrowing $1.3 billion against an unidentified revenue stream.
“We don’t know where it’s going to come from,” Schofield said.
Virtually all the “cuts,” Republicans insisted, were accounting gimmicks and money transfers. The largest transfer was a cut in the sales tax accompanied by an increase in the Democrats now famous “millionaires tax.”
The budget reduces the sales tax from 6 percent to 5.5 percent, but even this cut is contingent and can be re-boosted if a future budget shows a deficit. The Democrat’s increase of the state income tax on individuals earning half a million and couples earning a million a year from 5 percent to 6.5 percent is not contingent; which is to say, it cannot be repealed even if the state shows a surplus.
Gov. Jodi Rell, who might have vetoed the tax heavy cut deficient budget, thus showing solidarity with other Republicans, instead decided to take the easy way out: She will let the legislation pass without signing it.
After thanking Rell for working with Democrats to produce the swollen $35 billion budget, no Republicans in the senate having voted for it, President Pro Tem of the senate Don Williams allowed, “There will be no perfect budget in this - the worst budget year in our lifetime. This budget does about the best we can possibly do in these tough times.''
He was grateful the governor had not been “wedded to strict ideology” concerning budget issues, unlike the Democrats, wedded for more than 20 years to a crippling and possibly counter productive millionaire’s tax.
A few days before the vote, George Jepsen, a Hartford lawyer, former state senate Majority Leader and chairman of Connecticut’s state Democratic Party, warned his party in an op-ed piece against adopting a millionaire’s tax.
Mr., Jepsen wrote that the tax “exacerbates what economists agree is a major defect of our current revenue structure — over-reliance on a narrow, affluent population — which leaves the state's finances highly vulnerable to economic volatility, especially on Wall Street. It also codifies the class warfare ethos of the Democrats (mitigated somewhat by the governor's proposed elimination of the estate tax). This rhetoric gives the wealthy one more reason to shift residency to tax-friendly states, as so many already have, taking their income, local purchases, job creation and philanthropy with them.”
It is a point Republicans had been trying for months to press without success upon Democratic Party ideologues such as Williams and Chris Donovan, the Speaker of the state House and a former union steward.
Speaking from the belly of beast, wealthy Greenwich, where toney rich folk such as Attorney General Richard Blumenthal park their cars at night, Sen. Scott Franz said that Connecticut’s revenue collections were in “a downward death spiral. Anecdotally, hundreds, if not thousands of firms have left the state of Connecticut” for safer environments such as Bermuda which will “treat your capital, treat your families'' in a welcoming way.
The economic die, as Caesar one said in a different connection, has been cast.
And on a throw of the dice, the retreat bridges have been burnt.