Commentary—

The Looming Phony Budget Crisis

By William A. Collins

                       State is broke,

                       So here’s my plea;

                       Do your worst,

                       But not to me!

In 2005 Connecticut, as usual, faces a budget crisis. Fortunately it’s not because our state is actually poor — we’re loaded. It’s because we’ve squandered our wealth on foolish bonding projects, turned a blind eye to underfunded pension plans, and backed away from fully taxing folks who can afford to pay.

Expect more of that this year. Yes, fat cat developers, often the beneficiaries of all that bonding, are momentarily underground thanks to John Rowland. But the bonds that were already issued on their behalf must now be paid back, by you know who.

In such circumstances governors invariably talk bravely of belt-tightening, like a family whose breadwinner has been laid off. By this they mean imposing hardship on those who don’t support them, and on those who are powerless to fight back. This translates into further cutting of health care for the poor (Medicaid) and education aid to cities and towns.

As we know, the poor generally don’t vote, and in any event don’t vote Republican, so our governor’s budget will probably seek ways to cut “waste” and “duplication” in their health care. But the Democrats, many of whom suffer from “bleeding heart syndrome,” strongly control the legislature, and will surely put up a stiff fight.

Mayors too, are vulnerable. They have no friends at all in Hartford. Since each possesses only one personal vote, and since their towns can’t contribute to election campaigns, who needs them? Thus the governor can simply say to Republican mayors — and legislative leaders to Dems — “Sorry old chum. We’re up against it this year. You’re on your own.” The mayors will thereupon have to raise local taxes, loudly blaming the state. But voters won’t really care about the state and will sting the mayor at the next election.

Such is the elaborate dance performed every year at the Capitol, even as waste, cowardice, and greed dominate the real decisionmaking. Is there any chance of reform this time? Maybe a little. The new democratic leadership seems somewhat more socially conscious than its predecessors, and the new governor is especially eager to avoid accusations of arrogance.

Fortuitously adding to this turbulent mix is a new Quinnipiac poll divulging that even in Fairfield County the public favors a “Millionaire’s Tax.” (Of course it does. How many millionaires do you think there are down here?) And a Republican state senator, Anthony Guglielmo, wants a study of all the tax breaks and loopholes that currently infest our statutes.

As well he might. Take, for example, the succession (estate) tax, quietly being phased out to save still more money for the wealthy. In truth we should be phasing it back in! And why, pray tell, are car washes exempt from the sales tax, or the Hartford Civic Center, or winter yacht storage. There are literally hundreds of such special interest loopholes lovingly nurtured by sleek lobbyists that the General Assembly could utilize to forestall the budget crisis.

Another nifty gimmick for the rich, mimicking federal law, says that capital gains will be forgiven at death. Heirs thus acquire the asset at its current value and pay nothing for all its years of growth. The rest of us should be so lucky.

This loophole, especially, reflects the artificiality of the whole crisis. It exists because, in addition to the aforementioned cowardice and waste, rich people seek to buy special privilege for themselves, and lawmakers willingly sell it to them.

(Columnist William A. Collins is a former state representative and a former mayor of Norwalk.)