In a recent column about the state budget, I noted that Republicans have proven they are ready to lead the state in a new direction. During the legislative session, we proposed three no-tax-increase budgets that reduced state spending and made important changes to the way municipalities and education are funded by the state. Unfortunately, Democrat leaders in the legislature have refused to debate any Republican budget proposals.
During the last week of the fiscal year, which ended on June 30, Democrat Speaker of the House Joe Aresimowicz dismissed calls to bring the House into special session vote at least on a temporary budget to continue funding vital social service for the elderly and disabled.
Instead the Speaker called for a session on July 18th to pass a portion of state House Democrats revised budget, which calls for a 10 percent increase in the sales (from 6.35 percent to 6.99 percent) while also retaining the 7 percent luxury tax. In addition, the Democrat plan includes a tax on food and beverages in restaurants at 7.99 percent.
The date the Speaker chose is significant because state employee unions are expected to have voted on a concession package negotiated by Governor Dannel Malloy. Aresimowicz is employed by one of the unions and seems confident the package will be approved since he included it in his budget proposal.
Legislative Republicans have pointed out, and moderate Democrats agree that the package is weak and does not go far enough to address the long-term structural costs that are choking the state. It also includes a five-year no layoff provision and job guarantees to the year 2027 that would be disastrous if another recession hits during that time.
Connecticut should follow states that were bold enough to make hard choices and implement reforms needed to repair their failing economies.
North Carolina, more than any other state in recent years, has provided a model for what pro-growth tax reform and conservative fiscal policy looks like. In 2010, the state had the highest personal and corporate income tax rates in the region. After enactment of multiple rounds of tax relief, the state soon will have a personal income tax rate that is 32 percent lower than what the top rate was only four years. And the corporate rate, which was reduced by more than 63 percent since 2013, is now the lowest corporate income tax rate among states that impose such a tax. Once again, North Carolina’s legislators are providing tax cuts and surplus dollars back to their residents.
These moves are part of the reason North Carolina has gone from having one of the worst businesses tax climates in the country (ranked 44th), to one the 11th best, according to the non-partisan Tax Foundation.
We can face these challenges and create a brighter future for our state, but we must act now. We only have to look to Illinois and Puerto Rico to see what putting off difficult decisions will do. We must not allow our state to get to that point.
By passing the proposed Senate Republican budget when the legislature next meets, we can begin the repair Connecticut’s failing fiscal climate. We can then explore tax cuts that will bring much needed economic momentum to the state.
In the video below, former President John F. Kennedy eloquently explains that making the right tax cuts can create prosperity for individuals and business.