The Hartford Courant has only recently discovered the vital
connection between taxes and spending: The more you tax, the more you can
spend.
For many years, stretching back to the administration of
maverick Governor Lowell Weicker, the father of Connecticut’s income tax, the
paper argued in countless editorials and op-ed pieces that Connecticut did not
have a spending problem; it had a revenue problem. Translation: The state needn't
worry about the level of taxation or spending or regulation, a hidden tax on
the cost of business in the state, for as long as Connecticut was viable enough to
continue to increase taxes. Any bumper stickers from the failed anti-income tax
years reading “I survived the Weicker income tax” are, this year, 23 years old.
In two years, Connecticut will be celebrating the 25th anniversary of
the Weicker income tax – which, during its day, was thought to have solved
Connecticut’s revenue and tax problems.
However, Connecticut had not left its deficits in the dust.
There are voters in Connecticut who have no personal memory of pre-income tax
days when then Democratic Governor William O’Neill was struggling with a
deficit of about $1.5 billion. Mr. O’Neill’s
predecessor, Governor Ella Grasso, who could pinch a penny until it screamed
and who was a far more prudent spender than Mr. O’Neill, was at least as
vigorous an opponent of the income tax as Tom Scott, one of the anti-income tax
organizers of the largest protest rally in state history. During the administration
of Mrs. Grasso’s predecessor, Republican Governor Tom Meskill, an income tax
bill had been approved by Connecticut’s General Assembly; the measure was
quickly repealed, and from that day forward Mrs. Grasso became an implacable
foe of the income tax. Mrs. Grasso really did think that instituting an income
tax in response to budget deficits would be like “pouring gas on a fire,” an
expression used by Mr. Weicker during his gubernatorial campaign to convince
those who might vote for him that he would reject the arsonist impulse once he
had become governor.
Still tooting its most favored premise – Connecticut has no
spending problem; it has a revenue problem – the Courant rejoiced in the
Weicker solution. Governor Dannel Malloy’s
solution to deficits was precisely the same as Mr. Weicker’s. Mr. Malloy, the first Democratic governor
since Mr. O’Neill, passed through the Democrat dominated General Assembly the largest tax increase in Connecticut’s history. Looking forward, Connecticut –
following the two largest increases in state revenue – is now facing a biennial
deficit of some $2.8 billion.
And Connecticut taxpayers, previously suckered by the
Courant’s pitch, are beginning to feel as if they had been sold a lemon by
shifty used-car governors. Mr. Malloy, following the imposition of the largest
tax increase in Connecticut’s history, has promised on numerous occasions that
he is done with tax increases. Few believe him. Mr. Malloy now finds himself between a rock
and a hard place of his own making: Having pledged not to increase taxes, he
must reduce a deficit larger than that facing Mrs. Grasso, Mr. O’Neill or Mr.
Weicker – and yet he has pledged not to decrease spending.
What to do? The political problem is this: How do you raise
revenue, while at the same time appearing to reduce taxes?
The answer to this apparent conundrum is simple, according to the latest Courant editorial:
You form a commission that will, you hope, recommend to Mr. Malloy and the
Democratic dominated General Assembly a severe reduction of municipal property
taxes, a revenue stream used by towns to finance municipal government. The reduction -- better still, the elimination
of property taxes – will be absorbed by state government, and the drastic
change in revenue streams will break the back of municipal opposition to
spending and higher taxes.
The tax reform measure supported by the Courant offers
additional benefits to grasping politicians:
It will remove political decision making from town to state government
and, in effect, make town governments – which have in the past controlled
spending in response to budget deficits – wards of the state. The same
Democratic Dominated General Assembly that has in the past imposed on state
taxpayers, now dwindling in number owing to the out-migration of Connecticut’s
middle class, the two largest tax increases in state history will be charged
with the spending and revenue problems of town governments.
Fox, meet henhouse.
The tax-soaked and over regulated people of Connecticut
should reject any reform that will, directly or indirectly, increase state
taxes while shifting spending reform from municipal to state government. It is perfectly obvious to anyone who has
lived in Connecticut with his or her eyes open for the last quarter century
that municipal governments can and do control municipal spending, while state
government cannot and will not control state spending.
There are two reforms essential to restoring the well-being
and political health of Connecticut: 1) Cut spending, 2) Get the fox out of the
henhouse.
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