Sunday, February 05, 2017

The Progressive Vortex: How State Government Will Help Towns To Destroy Their Budgets


It was Rahm Emanuel, then consigliore to the Obama administration, now mayor of crime infested Chicago, who once reminded us that clever Harvard educated politicians and street organizers should never let a crisis go to waste. Progressives in the General Assembly have wholeheartedly adopted Emanuel’s view.

In his most recent budget, likely unbalanced, Malloy will present to the General Assembly a progressive measure that would “shift $407.6 million, nearly one-third of the annual cost of municipal school teachers’ pensions, onto cities and towns — a move that would hit the state’s wealthiest communities the hardest,” according to CTMirror.

So some say. It is worth noting that the “progressive tax by other means” will draw down municipal resources, weaken town government and pave the way to a false solution: the replacement of town governments with a regional structure overseen by a state that, unlike municipal governments, is chronically incapable of balancing its own books. Once you allow the redistribution of educational funds inequitably, the progressive scheme may be applied progressively in other ways. The crisis in state government, for those operating on the Emanuel principle, need not lead to more responsible state government. The opposite is true: progressivism allows governing bodies to escape public scrutiny, expand powers executed irresponsibly and lay the blame for misgovernment on innocent parties.


During his past two campaigns, Malloy had vowed not to raise taxes – for politically sound reasons. The governor and his progressive comrades in the General Assembly had already instituted both the largest and second largest tax increases in state history. Connecticut’s tax increases over the years have convinced businesses both inside and outside the state that the former insurance capital of the world – the nursery of Travelers, Aetna, CIGNA and others – simply is not serious about controlling its reckless spending.

Even the Hartford Courant long ago abandoned its often iterated notion that Connecticut was not suffering from a spending problem. What ailed the state, the Courant had insisted in countless editorials and opinion pieces, was a revenue problem the solution to which was tax increases. A late convert to reality, Malloy’s budget guru, Ben Barnes, was struck late in the game by the obvious bolt from the blue. And he warned us in sepulchral tones that deficits would be with us well into the future.

The future is here. It is frighteningly like the past – full of state employee pension IOUs, shrinking revenues and unpaid debts. If you can’t raise taxes because you’ve vowed not to raise them, and you can’t make permanent cuts in spending because supportive unions would heatedly object to necessary reforms, what other course is opened to you?

Easy: You conduct a midnight raid on municipal resources. Most Connecticut towns have over the years balanced their budgets, which are financed through property taxes, the bulk of which is spent on teachers’ salaries and benefits. Those municipalities that have not addressed spending reform, such as Hartford, Bridgeport and New Haven -- three metropolitan areas essential to the election successes of progressive Democrats – are now teetering on the point of bankruptcy. And their needs are to be met, hardboiled progressives aver, not by making economies in spending but by shifting financing from responsible to irresponsible municipalities; or, to put it in rhetorical terms favored by progressives -- transfer payments must flow to each according to his needs, from each according to his ability.

Hartford is poor in revenue resources because half its property is untaxable and the city, relying on transfer payments from the state, has not made serious attempts to control its spending. In fact, economies made in salaries and benefits, if any, are nearly impossible because these expenditures are set by the state through contract negotiations conducted between the governor’s office and state unions. Such are the roots of Hartford inability to shape its future through prudent tax and spending measures.

Now then, the proposed progressive solution to Hartford’s imminent bankruptcy – transfer tax receipts from rich to poorer municipalities -- does nothing to address any of these problems. It simply postpones solutions.

Allowing Hartford to tax untaxable property at a reasonable rate and retain the tax receipts in its own budget might help. Permitting the city to conduct direct negotiations with its own unionized employees through statute rather than contracts might help. Increasing the independence of cities through a reduction in state mandates might help. Ending binding arbitration, in which unelected deciders shape union contractual demands, would re-democratize municipal government. Expanding educational opportunities through greater educational choices – charter schools, private schooling -- certainly would help to invigorate the mission of education, most importantly in public schools. Because the state underfinances charter schools by about 17%, the founders of the Amistad Academy, who operate several schools in Connecticut, will no longer be expanding in the state, choosing instead to expand in Rhode Island and New York.  But these are not the solutions being proposed for debt infested cities that pass children through inferior and unreformable urban schools.

No, instead of solving Connecticut’s problems rationally and courageously, the state is proposing to enrich itself at the expense of tax strapped municipalities, so that state government may continue to finance without interruption its own past egregious spending proclivities. And why? Because progressives are loath to let a crippling crisis go to waste.




Post a Comment