The statement “truth in politics” can often be considered an oxymoron, which is why it’s refreshing that third-party gubernatorial candidate Jonathan Pelto freely admits the state’s looming $1.4 billion budget deficit signals that Connecticut has a broken fiscal system.
Pelto, a former Democratic state representative, is spot-on with his analysis. Unfortunately, his remedies for fixing Connecticut’s long-term budget woes would be another dose of bad medicine for the business community.
Pelto, whose campaign is trying to petition its way on the November ballot, recently told the Connecticut Mirror he would raise Connecticut’s income tax rate several percentage points on people earning in excess of $1 million.
That would follow on Gov. Dannel P. Malloy’s 2011 income tax increase, which raised the top rate to 6.7 percent from 6.5 percent.
Pelto said he doesn’t buy into the notion that increasing taxes on the state’s highest earners will cause millionaires to flee the state. But that is the same short-sighted thinking that has caused Connecticut’s economy to stagnate for more than three decades.
Can millionaires afford to fork over a few more thousand dollars to help the state balance its budget? Yes, many of them probably can, but any more near-term tax increases, whether they’re aimed at individuals or businesses, essentially shuts the door on Connecticut ever being considered a business-friendly state.
Connecticut has a budget problem, but the idea that another round of tax increases will solve it, is laughable. Recent history confirms that.
When Malloy and the Democratic legislature raised taxes by $1.5 billion in 2011 — Connecticut’s largest ever tax increase — promises were made that the state’s fiscal ship would sail in the right direction. Instead, Connecticut faces another gaping hole in its bow with a projected $1.4 billion deficit next fiscal year, according to the Office of Fiscal Analysis.
Meantime, economic growth in Connecticut has been negligible. The state hasn’t seen more than 1 percent annual gross domestic product growth in more than four years.
Any state that has to increase taxes every few years to balance its budget surely can’t expect to significantly grow its economy; Businesses seek stable environments where rules and tax rates aren’t excessive and/or constantly changing.
Those aren’t just business lobbyist talking points. Those are topics discussed in board rooms as executives decide where geographically to invest in people, equipment, and facilities.
The sooner Connecticut politicians realize that over spending, and not taxes, is the real cause of the state’s financial ills, the better we’ll be able to address solutions that help grow the economy and create jobs that spur opportunity.
Kudos to CT’s congressional delegation
Connecticut’s five-member Congressional delegation deserves kudos for their work trying to gain passage of a six-year transportation infrastructure funding bill in the U.S. House of Representatives.
Reps. John Larson, Rosa DeLauro, Joe Courtney, Jim Himes, and Elizabeth Esty are calling on House leadership to cancel Congress’ August recess so that policymakers could devise new legislation that replenishes the federal Highway Trust Fund, which is expected to go belly up at the end of this month.
Connecticut’s crumbling infrastructure is in desperate need of repair, and federal funding is a crucial part of the financing. This is one area where even the business community supports higher levels of federal and state government spending.
Let’s hope Washington D.C.’s Congressional gridlock can ease up just a bit so states can patch up their roads and bridges.
