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December 10, 2003
THAT COAL IN YOUR STOCKING WAS PAID FOR AT TAXPAYERS’ EXPENSE
By Senate Republican Leader Louis C. DeLuca
Along with visions of sugarplums dancing in their heads, those happy little elves known as the Connecticut legislative Democrats dream of enacting a statewide “Millionaire’s Tax” to free themselves from the inconvenience of governing. Derived from the age-old axiom that “the only fair tax is the one I don’t pay,” the “Millionaire’s Tax” has been dressed up and trotted out the past few years as a fantasy-land alternative to the honest discussion we should be having about structural spending reform and controlling the size of Connecticut’s state government.

Unfortunately, the legislative Democrats seem to lack a stomach for governing in tough times, so they cling to the “tax the rich and we won’t have to make any real decisions” fantasy that makes them feel better and keeps their rank-and-file members from complaining too loudly. After all, the Democrats learned long ago that this kind of class warfare is an easy way for them look like Santa Claus and us like “greedy Republicans” as we try to explain the intricacies of binding arbitration reform or unchecked government growth amidst the roar of “rich vs. poor” rhetoric.

This rhetoric, however, doesn’t roar by itself, so the Democrats routinely treat us to self-congratulatory press conferences where solemn “policy-makers” pat themselves on the back for their commitment to soaking the successful (who already foot 80% of state government’s tab) in order to keep from having to make tough decisions about what to spend your money on. It’s funny, kind of, but mostly just frustrating, watching them roll out this tired dog-and-pony show every year to the delight of the same special interest groups who are already delighted with them anyway.

The newest example of this tax-and-spend initiative is perhaps the most ill conceived yet. Rolled out just before Thanksgiving in what one can only hope was a sly acknowledgement of the fact that we were all about to be served a bunch of leftovers, the brand-new-super-innovative “this-will-fix-everything” Democrat plan enacts a 20% rate increase on income tax for “millionaires” (single people making $531,500 a year) to increase “education aid to towns” (aka – teacher salaries) through the notoriously distorted Education Cost Sharing (ECS) formula.

In other words, the Democrats plan to raise taxes and increase government spending. Fine, this is what Democrats do. But when our economy is still reeling from the post-9-11 recession and we already lag behind the rest of the region in economic recovery, this whimsical talk about taxing and spending should strike a chord of terror in heart of anyone who cares about the long-term economic health of the state.

You see, rather than assuming the mantle of leadership and acknowledging the reality of the hobbled economy, these Democrats turn to press-conference-ing over governing. With straight faces they claim that the state millionaires “know a good investment when they see one,” and for this reason, it is implied, will now happily fork over 20% more in state taxes every year to fund the Democrat’s vision of the highest paid teachers in the universe cashing checks with “love, Connecticut’s millionaires” written in the memo line. That’s a swell idea, but my guess is these millionaires will recognize that, for them, an even better investment would be to purchase a home in Florida, pay NO income tax, and let the Connecticut Democrats figure out who’s going to pay for other people’s children to go to school.

It won’t be cheap. Outside of the initial $170 million tax increase, their plan increases spending at unsustainable levels, balances on paper for but a single year, and creates a massive hole in the out years that will require further, uglier tax increases to fund. Go and ask the Democrats who’s going to foot the tab beyond 2005. They won’t tell you, but my guess is that the definition of “millionaire” will become much more, shall we say, “flexible,” and eventually include the middle class.

But what’s truly disappointing, sad and frustrating is the fact that if we simply worked together to reform the state’s binding arbitration laws, which effectively mandate outsized increases to municipal employee salaries every year, we could do more for education funding and property tax reform than even the most lopsided millionaire’s tax fantasy could ever accomplish. Nearly every municipality in the state has begged for the loosening of the chokehold that binding arbitration puts on their budgets, and it has been endorsed by all of the usual suspects in the world of municipal government advocacy, including CCM, COST and several state newspapers.

The Democrats, however, stand opposed to this effort because they recoil at the suggestion that somehow a problem can be solved without flinging gobs of your tax money at it, and they certainly don’t want to upset their favorite public employee union leaders who want nothing more than to siphon your tax dollars, on both property and income, into bloated contracts and gargantuan salary increases.

Thus, these Democrats who can’t govern are left to preach class warfare with their union leader friends who can’t stop demanding more, while the rest of us try to act responsibly and keep Connecticut’s spending at levels the taxpayers can afford. For the sake of all of Connecticut, let’s hope those happy little Democrat elves leave their tax-and-spending plans in Santa’s workshop before the Connecticut economy turns into an unforgiving Grinch.