Monday, February 16, 2009

Nickerson, Whistleblower

Having experienced ex-governor and senator Lowell Weicker and remembering that Weicker recruited Ned Lamont, a fellow redundantly rich Greenwich millionaire, to run against Sen. Joe Lieberman, Republicans may be asking themselves “Can anything good come out of Greenwich?”

The answer is “Yes.”

William Nickerson, a former state Rep. and senator, hails from Greenwich.

The state legislature, Mr. Nickerson reminds us, is used to fiddling while Rome burns. Now out of office and therefore free to speak the truth, Mr. Nickerson has identified in a column several “myths” about his former band of brothers that ought to be exploded so that the state can achieve financial sanity.

Myth No. 3 is especially instructive: “Each year government programs are rigorously evaluated by the legislature with unworthy ones reduced or eliminated and effective ones expanded.”

Drawing from his 22 years of experience in the legislature, Mr. Nickerson concluded that instead of reviewing, paring back or reforming programs that might save the state some money, the legislature, determined not to ruffle the feathers of those who livelihood depends upon inefficient or unnecessary programs, “takes a top-down approach beginning with a projection of what it will cost to carry forward all of the government programs and services from the preceding year to the next. This is called the Current Services Budget and invariably shows significant spending increases. There then ensues a pulling and hauling among legislators largely focused on which line item has the most political support. However, there is no fundamental examination of broad-based program effectiveness. In fact, there is no institutional framework available to legislators to even undertake such an examination.”

In Myth No. 2, Mr. Nickerson notes that the state’s constitutional cap on spending is not a “mere guideline” but “a sacred covenant between the voters who approved it and the legislators who are expected to carry it out,” routinely violated by legislators and governors who often utilize “such gimmicks as off-budget appropriations and declarations of "emergencies" which were in fact nonexistent.”

Perdurable myth No. 4 holds that Connecticut’s income tax is not progressive. This flies in the face of years of restructuring and reform: “Today, the typical Connecticut home-owning household of four at the median income level of $53,000 pays little or no income tax. At the high end of the spectrum, a tiny group of only 43,000 families pays approximately one-half of the entire income tax revenue.”

Indeed that is the problem: Our tax receipts are down because the income tax is no longer broad based, and we are reaching a point in which tax consumption will far outpace tax supply. Once consumers who pay no taxes out number tax suppliers by 51%, they can write their own ticket to dissolution and destruction, and undoubtedly will.

Effective solutions to all these difficulties can only be advanced by radical reformers.

Here are five reforms:

1) Institute a flat rate negative state income tax. The negative feature will assure that those falling below an income line to be determined by the legislature will a) pay no income tax, and b) receive tax grants in lieu of welfare payments, enabling the state to eliminate relevant welfare departments. The flat rate tax also will insure that everyone in the state will be equally invested in tax and spending policy.

2) Or if a flat rate tax is not your cup of tea, eliminate the income tax by prudent long term measures and replace it with use taxes, the net taxes collected to remain the same during the transition period.

3) Institute a state budget referendum similar to municipal referendums: No state budget passes that does not garner more than 50% of a state-wide vote.

4) End binding arbitration.

5) Assure that every regulation and mandate imposed by the state on the municipalities must be paid in full through state taxes.

And, as an added cherry on the cake -- because it's the right thing to do -- put Attorney General Richard Blumenthal out to pasture.

It’s a beginning.

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