• Home
  • Posts
  • Column: Budget Woes: A Case of the Chickens Coming Home

Column: Budget Woes: A Case of the Chickens Coming Home

edward-dadakis-fi

By Edward Dadakis

It’s springtime in Connecticut. This means warmer temperatures, trees budding and crocuses pushing up through the dirt. It also means our Hartford state legislators are embroiled in financial acrobatics to develop a spending, and taxing, blueprint for the next two years.

We’re in the seventh year of Democrat Gov. Dan Malloy’s tenure and his left-wing, liberal economic orthodoxy, which pushed enormously higher taxes and unsustainable spending. Having controlled the legislature for decades, sometimes with a veto proof majority, Democrats long had free rein with Connecticut’s economy. Their result is a disastrous failure.

Despite massive tax increases over the past seven years the budget still isn’t balanced. No one knows the actual figures as they’re constantly changing, but best estimates are Connecticut is facing a $3.4 billion deficit over the next two years. This massive deficit is due to Democrats sticking their heads in the sand and refusing to make hard choices, or face economic reality, which could have put Connecticut on a trajectory to economic prosperity.

Today the main problem is decreasing state revenue. After years of tax increases, massive spending increases far outpacing inflation and an unfriendly business environment, taxpayers are fleeing Connecticut in droves. The Wall Street Journal reported that last year 30,000 residents moved to other states and, since 2010, 27,400 moved to Florida alone. You can bet those leaving are the ones paying significant taxes. Hence the revenue problem.

This outflow of taxpayers has been denied or trivialized by Democrats for years. I remember 20 years ago Sen. Bill Nickerson repeatedly warning that Democrat fiscal policies, especially the death tax, would drive taxpayers from Connecticut. Democrats denied it. In fact, they ridiculed those who dared make such assertions and they continued to spend with impunity, tax with impunity and give their union buddies anything they wanted. The Rev. Jeremiah Wright once famously said the chickens have come home to roost, and that is exactly what is happening in Connecticut.

With this year’s budget proposal, Malloy clearly realizes he’s in big trouble.  Calling for $1.5 billion of union givebacks, he’s threatened layoffs as the alternative, but even if he succeeds he still proposes a spending increase. He’s played games with past efforts to rein in union costs (remember the $90 million proposed savings from the employee suggestion box?), so we’ll see if he caves on his demand or compromises with gimmicks. 

Equally concerning is Malloy’s attempt to saddle municipalities with costs previously paid by the state. Kicking the expense to localities is not effectively managing a budget and will mean tax increases at the local level.

Greenwich taxpayers send to Hartford a whopping $650 million in annual income tax receipts and only now get $4.2 million back in state grants. Despite the windfall from Greenwich, Malloy appears gleeful he’s stopping even the small amount of aid our town receives.

The big Greenwich aid item is the New Lebanon school reconstruction. The state, using standards that ignore neighborhood schools demographics, has declared the school not racially balanced. To solve the problem, the state and town agreed to convert New Lebanon to a magnet school. Greenwich proceeded because the state was providing reimbursement up to 80 percent of construction costs.

Now Malloy has singled out our project, demanding the bond commission deny it. Should that happen, either Greenwich taxpayers make up the difference, and I doubt the RTM will, or get ready for the bussing of students. At the least, if the state denies funding, they should suspend their racial balance rules.

The other big state budget saving gimmick Malloy proposes is to foist on towns one-third of state teacher pension obligations. In Greenwich’s case, that would be $10 million annually and growing. Teachers contribute to their pensions, yet the state isn’t sharing any of that revenue. Since teacher pensions were always managed by the state, the town doesn’t contemplate those costs in the collective bargaining agreement. Had Greenwich known they’d incur pension obligations, it’s likely that different contract terms would’ve been negotiated.

There’s enormous resistance to the pension proposal in the legislature, so enactment is far from assured. If it passes, I certainly hope our town’s financial leaders will not simply raise taxes on our citizens, but rather cut the teacher salary account by the amount of the pension obligation. Someone other than taxpayers should shoulder those costs. The taxpayer is already bearing a high enough burden.

So far legislators aren’t seriously talking about higher income or death taxes, but additional fees and other taxes are being pushed. But stay tuned. There are many weeks left in this budget battle and anything can happen. It promises to be interesting… and scary.

Edward Dadakis, a lifelong Greenwich resident, has served more than 35 years on the RTM, having been first elected as one of its youngest members. He is a former chairman of the Greenwich Republican Party and currently represents our 36th Senatorial District on the Connecticut Republican State Central Committee. For the latest on politics, follow him on Twitter@EdDadakis.

Related Posts
Loading...