Hartford’s hidden taxes

New Connecticut regional tax structure is devoid of common senseOn Feb. 8, Governor Malloy put forth his vision for our state budget for 2018 and 2019. Deficit projections currently forecast at $1.5 billion and $1.6 billion, respectively, make balancing a budget a challenge. Our governor’s fiscal solution to bring spending in line with revenues — push tax increases down to the municipal level and regionalize services. In a shameless shrouding of reality, governor Malloy claims his budget will not raise taxes. Who does he think he’s kidding? In reality, it cuts funding to smaller towns and subsequently forces these towns to increase property taxes to maintain services.

Here are three of Hartford’s hidden taxes that will dramatically impact your family and our town. If these provisions pass in the governor’s budget, Darien will owe Hartford an additional $6.4 million for 2018 alone. This is in addition to the $200 million of income taxes that Darien sends to Hartford every year.

  1. Darien will have to replace lost education funding In fiscal year ’16 we received $1.6 million in Education Cost Sharing. ECS is the per pupil reimbursement from the state, separate from the state special education reimbursement. In 2017 this number was ultimately cut to $400,000. This funding will be cut completely in the next budget. Darien is one of 31 towns out of 169 in our state that will have ECS funding completely cut.

Separately, Excess Cost Reimbursement for special education would be dramatically cut. In fiscal year ’17 Darien was allocated $2.4 M. In FY ’18 that number would drop to $100K in total. I believe strongly our special education students should be equally funded across the state, regardless of where they live or their financial situation.

  1. Darien will have to contribute directly to state teacher pensions totaling $4.6M in fiscal year ‘18. Governor Malloy has proposed every town pick up the tab for 33% of the state’s required teacher pension contributions, without any local control over union negotiations. Currently, teachers pay 6% toward their retirement, and the state picks up the rest of the contractually agreed-upon contribution. We should balance the budget in Hartford and not push teacher pensions onto town budgets.
  1. Darien may need to contribute an estimated 20% of our commercial and industrial tax revenues to the recently formed West COG Region in FY’18. Proportional voting for our Council of Government —West COG — remains under consideration during this session. Proportional voting would mean moving from “One Town, One Vote” for the 18 towns within West COG to allowing towns with more than 50,000 people another vote at the table for each additional 10,000 people in their town. The impact would give Stamford, Norwalk and Danbury a majority vote each time — enabling these larger cities to augment their tax base with funds directly from Darien, Greenwich, New Canaan and Westport among others.

What proof do the Democrats have that regionalization has a long-term beneficial effect? There is none. We are being asked one more time to buy into fantasy finance courtesy of the Democratic One Party Rule in Hartford.

Yes, our state’s fiscal deficits are massive, yet solvable. We are paying the price for decades of poor leadership from both parties, as well as the legislature neglecting to fully fund our retired state employee union pension obligations. Over the last six years, though, the decisions made by Governor Malloy and the legislative majority Democrats gambled on a healthy economy and increased taxation to fix our finances. While many states have rebounded after the economic meltdown in 2008, Connecticut has only regained 77% of its lost jobs. Our state is still not business-friendly. And, sadly, urban poverty continues driving a good part of our state budget challenges.

Many of our state’s fiscal policies continue to be driven by Hartford Democrats who embrace a far-left progressive agenda that is costly and tightly aligned with the state employee unions. Most Democrats in Hartford also blindly accept the mantra that local government is inherently inefficient, to build their case for regionalization and to open up a yet untapped tax revenue stream from smaller well-managed towns like Darien. Thus, they justify increased funding to urban centers and decreased funding to fiscally functional municipalities.

There are better solutions than hidden taxes. We need a healthy and fact-based debate on what is fair, equitable and sustainable, and fix our budget mess once and for all. There is no question that sacrifices will need to be made and we must figure out collectively how they can be fairly shared. I’ll be addressing some of these opportunities and solutions in an upcoming commentary.

Please stay informed. CT Mirror is a non-partisan online news source and CT-N offers live and recorded coverage of proceedings in our Capitol. It’s also important for your legislators and the governor to hear your thoughts on these proposals. Together, we can and we will solve these issues. Please stay in touch. terrie.wood@cga.ct.gov or 860-240-8700.

An original version of this article ran in the Darien Times on Mar. 4, 2017.

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