If Connecticut’s next state budget can be considered a sort of poker game of tax cutting, Gov. Ned Lamont has opened with $500 million and the minority Republicans in the state Senate have seen his $500 million and raised him $1 billion.
But it’s not as hopeful for taxpayers as it looks.
The governor, a Democrat seeking election to a third term in November, proposes to spend $500 million to issue state tax “rebates” — $200 for single people and $400 for couples — a week ahead of Election Day. (If President Trump, a Republican, tried something like this, Democrats and most journalists would scream: “Bribery!”)
If things go according to what seems like the Democratic plan, soon after the election state residents will be hit with big increases in oil, gasoline, natural gas, and electricity prices as a result of a “climate superfund” tax many Democrats want to levy against energy producers to punish them for letting state residents use their fuels for the last century. Of course the energy producers won’t pay the tax by themselves; they’ll recover the cost by raising prices and the public will pay. But people will blame the energy producers, not the elected officials who enacted the tax and quickly took their “tax rebates” away.
The Republican senators, previously tribunes of fiscal responsibility, have counterproposed sharp reductions in the state income tax and property taxes on cars, $1.5 billion worth — reductions that might endure year after year.
The Republican senators also would eliminate state government’s “public benefits” charges on electric utility bills, which help to make Connecticut’s electricity prices nearly the highest in the country.
Sen. Ryan Fazio, R-Greenwich, a candidate for his party’s nomination for governor, says, “There is so much pork stuffed in our public benefits tax that it would boggle the mind — over 50 different government programs passed by the legislature and the governor over many years.”
Indeed, but Governor Lamont notes that some of the “public benefits” charges are not “pork.” They also pay for a guarantee of electricity supply from the Millstone nuclear power station in Waterford and for management of the regional electric grid. Some of the charges would be more honestly and transparently placed in the state budget and financed by general revenue rather than by what is essentially a sales tax on electricity, but they’d still have to be paid, and eliminating the “public benefits” tax won’t save as much money as Republicans imply.
So where is the rest of the money for the Republican tax relief to come from?
The Senate Republican leader, Brookfield’s Stephen Harding, says: “We have a $4 billion-plus ‘rainy-day fund.’ The people of the state have essentially been overtaxed by that much.”
Not really. This claim is wrong for the same reason Gov. Lamont, Democratic legislators, and state Comptroller Sean Scanlon are wrong when they claim that state government lately has produced balanced budgets with surpluses.
For the state employee and teacher pension funds are still underfunded by $35 billion or more, so the “rainy-day fund” and the supposed surpluses are really just borrowing from the pension funds and pushing their burdens deeper into the future, when they will thrust on taxpayers who weren’t even born when the pensioners were working, taxpayers who never benefited from the pensioners’ services.
When it comes to state budgeting and taxes, there are really only three ways of serving the public better: reducing the burden of government, improving services and making them more efficient, and eliminating the inessential. Connecticut fails badly in these respects.
The failure starts with state government’s failure to care about actual results. State government equates success with merely spending money even as important results worsen, including education, poverty, payroll control, and corruption. The Democrats can’t find anything to cut, especially since most failures profit Democrats, and the Republicans are too few and averse to being frank about the horrible.
Two-hundred-dollar “tax rebate” checks may help voters overlook failure but they won’t fix or improve anything.
Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net)
