Thursday, March 03, 2011

Looney For Taxes

During his visit to New London, part of a multi-town tour to sell his budget to taxpayers, Governor Dannel Malloy got an earful from stressed citizens.

An engineering manager who works in Montville, John Fearns, unburdened himself on state employee pensions.

Mr. Fearns’ business had absorbed some hard knocks during the current lingering recession when “layoff and furlough days were expressed in months, not days." Riffing on the “fair share” that has become a staple of Mr. Malloy’s appearances at town meetings, Mr. Fearns, looking the governor in the eye, asked, “So I'm asking you to look me in the eye, when you ask to raise high taxes for a business model that is unsustainable, one that offers a job for life, paid pension, a Cadillac health plan for as long as you live, and I'm asking you to tell me how you can say that's fair for me.”

According to a story in the Day of New London, “Malloy fired right back: ‘The guy who entered into a 20-year deal on benefits was not me; it was the governor in 1997 (John G. Rowland). Now I've got to deal with the situation that I have.’"

Jen Ezzel of Lisbon told the governor, "Gas prices are going up, clothing prices are going up, food prices are going up. The only thing that's not going up is our disposable income. ... I understand you need to grab money everywhere, but you know what? We don't have anymore money to give you. We're done."

Fortunately, some union supporters in the crowd styling themselves “The Campaign for the Middle Class” softened the buffeting. Scott Soares, a member of AFSCME Council 4, remarked, “We think the wealthy citizens of Connecticut should pay their fair share towards the deficit and we know that union members have paid their fair share already.”

While Mr. Malloy’s tax increases have been outlined in vivid detail in his recent budget address to the legislature, which contained a place holder line of fiscal year spending cuts secured from unions of about $2 billion, the governor’s evident disagreement with Mr. Soares will play out in a series of meetings between Mr. Malloy’s negotiators and union leaders so secret that even the times and places of the meetings will not be disclosed. In the course of the meetings, it is expected that the administration will ask or implore or demand that unions pay their "fair share" in the multi-year contracts under discussion.

Over at the Capital, according to a report in CTMirror, tongues are not wagging: “Leaders of the Democrat-controlled General Assembly have been relatively quiet about the sales tax proposals, or the $1.5 billion in total new taxes Malloy has proposed to help balance the next state budget.”

A persistent reporter, however, was able to tease a response from Senate Majority Leader Martin M. Looney, a New Haven Democrat and former co-chairman of the Finance, Revenue and Bonding Committee. Mr. Looney, generally friendly to union interests, said he believed that most lawmakers “understand unusual efforts are necessary to close a projected deficit ranging from $3.2 billion to $3.7 billion for next fiscal year."

Mr. Looney was responding to proposed tax increases that had gotten the owners of car dealerships in a huff. Mr. Malloy’s budget imposes a tax on used car sales previously exempted from the state’s increased sales tax. Since increased taxes on used cars raise prices, car dealership owners expect to lose business to other states and have cautioned that state revenue collections will suffer a loss as well.

Mr. Malloy’s budget, it must be said, is democratic in one respect: By eliminating tax exemptions and raising other taxes the tax pain is shared more or less across the board. Connecticut, a state that hopes to position itself favorably with respect to other job poaching states after the recession recedes, now taxes just about everything but sunbeams and union contracts.

Mr. Looney said of the increased tax burdens, “None of them are popular, but I think many people recognize that most of them probably are necessary,” a catchy line the loyal opposition might take note of when the Democratic dominated legislature begins to grow restive under the demands Mr. Malloy has promised to make of unions during their secret back room negotiations.

If Mr. Malloy hopes to wring $2 billion in the next two years from union chiefs in continuing "fair share" negotiations, he will need a good deal of help from Mr. Looney and other legislators friendly to unions, such as Speaker of the House Chris Donovan and President of the Senate Don Williams, neither of whom have flinched at Mr. Malloy’s tax increases.
Post a Comment