The Quinnipiac University Poll released in July showed that by a 2-1 ratio, respondents wanted government to cut spending to close the record budget gap before raising taxes on anyone, including the wealthy. Connecticut households routinely trim their family budgets, something government is disinclined to do.
But another telling element largely overlooked in the 71-question poll was this: unemployment and job security ranked as the single biggest concern of the more than 1,400 randomly selected respondents. Connecticut residents are nervous about rising unemployment and they recognize that the best antidote to this global, national and local recession is a job.
Since Republicans produced a third alternative No Tax Increase budget Aug. 6 we have been talking to business owners, big and small, throughout the state who have spoken with one voice: higher taxes, more mandates and meddlesome regulations will cost Connecticut more jobs. We’ve already lost nearly 70,000 in this recession.
What can government do to create a way out of this economic malaise? The federal government first went into the auto industry and is now in the used car business. Its “stimulus’’ plan remains flimsy as national job losses continue. Connecticut’s government can do no such thing because we have a Constitutional requirement to balance our budget and we can’t print money.
It is the private sector, not state government, that will hasten our economy to higher ground through job creation. And we cannot afford to engage in class warfare in shaping our economic policy along the way. You cannot love the employee and hate the employer.
Our alternative budget proved that we can balance the state budget without raising taxes. Businesses alone would save $140 million. Connecticut is one of two states — Pennsylvania being the other — still without a budget. Unless we come up with some ways to get companies hiring again, recovery will remain elusive.
The $1.8 billion Democratic tax hike creates an even more unstable revenue stream on which to balance the state budget. Under this risky scenario, just 2.1 percent of Connecticut taxpayers would pay nearly 48 percent of all state income taxes — they already pay 43.1 percent. Love the rich or hate them, but does it make sense to place even more of a burden on such a narrow sector of our economy? The main reason our state lost more than $2 billion in revenue this year was because our tenuous revenue structure was highly vulnerable to market volatility.
For more than 200 years Connecticut has been the Provision State; providing goods and services in war time and peace to the rest of the country and world, from buttons and bullets to Whiffle Balls and widgets.
But our record in helping business grow jobs and attracting business more recently remains dismal. According to Expansion Management Magazine, Connecticut’s legislature was ranked as the “Least Friendly to Business.”
Putting thousands of more jobs at risk by raising taxes on employers in order to sustain government and increase spending will create massive future deficits and ensure more tax hikes in the very near future: try 2011 when we will very likely be engaged again in this very same debate.
We read the headlines weekly, whether it Stanadyne in Windsor or ABB Inc. in Norwalk, both of whom are packing up and leaving for cheaper places to do business, in each case North Carolina. Stanadyne will take 140 jobs with it when it leaves in 2011 and ABB, the global leader in electricity networks, 100. The other states in the ABB headquarters sweepstakes were Florida, Texas and Ohio.
The heavy burden of income and corporate taxes as well as high energy costs too often cost Connecticut jobs.
In the two years following the last state income tax hike Connecticut saw a net loss of more than 7,300 taxpayers to other states. With them they took more than $404 million in adjusted growth income that is no longer subject to our state’s 5 percent rate.
Eventually the legislature will come up with a budget. But policies that fail to recognize the direct correlation between taxes and mandates on businesses and job creation will prolong the recession.
Lawrence F. Cafero Jr. of Norwalk is the House Republican Leader
