My work in Hartford continues to be focused on bringing fiscal stability and financial viability to all in our state. I’ll start with the good news.
The governor and legislative leaders of both parties worked together on a solution to the longstanding insolvency of the Connecticut Unemployment Insurance Trust Fund. While not a sexy topic, it has been critically important to resolve the ongoing crisis. This fund has been insolvent the last 48 out of 50 years forcing Connecticut to borrow money from the federal government to keep it solvent.
This bipartisan agreement prevents the borrowing cycle from repeating itself by using some of the pandemic relief funds to stabilize the fund. It restores the fund by reducing tax rates on businesses and reforming benefits and aligning benefits with neighboring states. Working together and finding common ground with solutions benefits all in our state. This is a small though important step in continuing to stabilize our state finances that is critical to attracting and keeping job creators and building our economy.
Now the not so good news —
That same week in Hartford, the Appropriations + Finance Committees completed their work on their biennium budget. The majority party voted to increase spending by 5.5 percent with a $1.9 billion tax increase over the next two years. The package now goes to the governor for negotiation and final budget before the end of session on June 9.
As a member of the Finance Committee, I was disappointed — dismayed in truth — at how the revenue package was formed and presented. The revenue package had little minority party voice in the final document voted out of committee.
We’ve seen success with bipartisan built budgets in the past. The 2017 budget, for example, created spending and volatility caps as well as a budget reserve requirement. That budget was balanced, did not increase taxes and poised us for future economic stability + growth. The political balance that session was 18-18 in the senate and 79-72 in the house. Good things happen with the spirit of cooperative bipartisan support.
This year is different.
One of the proposals voted out of the Finance Committee, creates a new state off-budget fund called Connecticut Equitable Investment Fund. The fund will “receive, invest, and distribute specified revenue and private investments”. This proposal had an exceedingly short runway from announcement to the committee vote. All of eight days. Very little time to get the word out and gather public feedback and testimony.
The stated purpose of this fund is to build wealth in underserved communities, reduce income inequality and reduce reliance on local property taxes in urban districts. Laudable goals no question. Though details on how this will be accomplished are thin. It creates a nine-member council to manage this new fund without clear oversight, transparency or accountability measures. The proposed revenues to fund this include a new consumption tax on incomes over $500K and a capital gains surcharge in addition to other taxes on high earners.
The group of people identified are already paying the majority of the state income taxes. And as the data proves, they are leaving the state in droves as a result of the punishing rate of taxation. How does this make sense? Is it reasonable to assume these tax increases will solve the problem?
Even as we see historic levels of federal funding coming to Connecticut and residents struggling to recover from the pandemic, Democrats are asking Connecticut residents to pay more. I don’t believe that this proposal is reflective of the voices of the majority of hardworking people in our state.
The governor has indicated -- at this point -- that he does not agree with this proposal.
Working together works. We know that. Many are weary of the political noise. Come together, work together and fix it! Voices in the community and collaboration counts. Always for the people, by the people.
I will continue to advocate for common sense along with a budget that is logical and rational...one that steadies our ship. Please share your thoughts and questions and sign up for my e-blasts by emailing me at email@example.com.
This article originally appeared in the Darien Times on May 7th, 2021.
Photo by Micheile Henderson via unsplash.com.