Thursday, February 09, 2017

Malloy’s Budget, Same Old, Same Old

If it were possible for Governor Dannel Malloy to transfer Connecticut’s debt backward to previous administrations, he would do so a New York minute. This being impossible, he has shifted blame for the state’s current indebtedness to preceding governors, absolving from adverse criticism, for some odd reason, former Governor Lowell Weicker, whom he rarely mentions as being a governor who had run up future debt by increasing taxes and spending.

Perhaps that is because Malloy himself has adopted Weicker’s strategy in attacking debt – raise taxes. Twice since he had been elected the first Democratic governor in twenty six years, Malloy has raised taxes, imposing on the state both the largest and the second largest tax increases in state history. The last Connecticut pre-income tax budget was about $7.5 billion; the current Malloy budget is nearly three times as large, every single penny of it having been appropriate from Connecticut’s real working party, middle class people mostly who uncomplainingly go off to work in in the morning, kiss their children good night in the evening, go off to working in the morning and pay their increasingly burdensome taxes.

The truth is that the General Assembly is responsible for getting and spending in the state. Inconveniently, both houses of the General Assembly have been dominated by Democrats for at least twenty years, and the body is, to put it simply a coward. It has adamantly refused to address the problem of spending. If spending is indeed the problem, the solution to the problem must involve PERMANENT cuts in spending, and such cuts can only be accomplished through basic long-term reforms such as:

1) Reduce business taxes and regulations, thus spurring job growth; 2) currently, union-state negotiations in Connecticut are governed by contract. In neighboring Rhode Island, statute governs negotiations, an arrangement that makes legislators rather than courts the true arbiters of labor disputes. A like change in Connecticut would return budget responsibility to elected representatives rather than to judicial decision makers; 3) Reduce benefits and salaries for new hires; 4) reform employee health care plans. Several towns in Connecticut already have realized savings by switching “their new hires into a high deductible health savings accounts and eliminated pension plans for non-union employees,” according to the Yankee Institute; 5) end binding arbitration, which in Connecticut has served as a union salary and benefit escalator; 6) allow leaders in the General Assembly to be active participants in any and all union negotiation and, most importantly, 7) cut spending.

Governor Dannell Malloy is a lawyer. Adjectives are important to lawyers. In a post budget presentation story, CTMirror notes, “The Democratic governor announced earlier this winter that he would not propose any major (emphasis mine) tax increases, but said last week that smaller (emphasis mine) increases could not be removed from consideration.” Following imposition of the two largest tax increases in Connecticut history, Malloy several times indicated that he would seek to balance future chronically out-of-balance budget by means other than tax increases. These clockwork representations were made prior to state elections.

CTMirror’s Keith Phaneuf has no difficulty is tagging the elimination of tax credits as tax increases: “The biggest tax increase in the new budget involves canceling the property tax credit.”

Non-lawyers would agree that cancelling the property tax credit is, for all practical purposes, a tax increase – and a big one at that. When a tax credit is removed, the put-upon taxpayer is forced to surrender to the state more tax money. And money traveling from her budget (studies show that more women than men handle house budgets; so much for silly notions that men rather than women are more math proficient) to a state budget represents a “tax increase, and a big one at that. Towns thrown on their own resources either will have to cut spending or raise property taxes to back-fill their budget hole.

How burdensome is the average Connecticut taxpayer’s burden? A 2015 Truth in Accounting comparative study pulls no punches: “Connecticut owes more than it owns. At -$49,000, Connecticut's “Taxpayer's Burden” [per capita] ranks 49th out of the 50 states. Connecticut is among 40 “Sinkhole States” without enough assets to cover its debt.”

Now, here is the odd thing. After two major tax increases why would Malloy and other progressives in the General Assembly need yet another major tax increase? And why are state legislators, who cannot balance a budget, reaching into balanced municipal budgets to finance their own deficits. Indeed, after three massive infusions of taxes, including Lowell Weicker’s 1991 income tax, why does state government, need more tax increases? Connecticut’s last non-income tax budget was 7.5 billion. The two year budget presented by Malloy on February 8th is  $40.6 billion.

Here is the answer to the question. Warning: it may not pass legal muster. Getting and spending and are not two sides of the same coin; they are the same side of the same coin, in this sense: whatever you get, you spend. If you are a budget minded female householder who balances the family’s budget, you might possibly be able to sock away some savings for future expenditures after you have paid your bills. This is something that Democratic guys (mostly) in the General Assembly are loathed to do – which is why bills remain unpaid. The more Connecticut taxes, the more it spends. Connecticut’s expenditures continues at their historic pace, outstripping revenues and creating future debt that may, if you are a crafty Democratic governor-lawyer, be passed on to future generations or be back-filled by conducting a raid on responsible towns that actually balance budgets.

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