Q-Poll – Because Public Opinion Polls are a fun “snap shot” about public attitudes.

Cross-posted from Pelto’s Point (New Haven Advocate)

Public opinion survey results are driven by three primary factors, how the pollster wrote the questions, who they asked and the depth of knowledge or understanding on the part of those who are being asked those questions.

So today’s Q-Poll is a perfect example of how difficult it is to survey voters on taxes.  Why?  Because people don’t like paying taxes and when questions are worded as a simple yes or no on any individual tax voters are always (or almost always) going to say they oppose that particular tax.

Since the news is full of budget and talk of increased taxes, Malloy is taking a big hit.  A majority, 51% percent disapprove of the way he is handling the budget and only 32 percent approve of the effort.

As Quinnipiac University Poll Director Doug Schwartz explains in his press release, voters “think he is raising taxes too much”.  Furthermore Schwartz observes that “While voters think he is raising taxes too much on the middle class, they think he could raise taxes on the wealthy more”

While the Q-poll is clear, people don’t like taxes there is a very interesting question that is completely overlooked in the press release that the pollster sent out.

While overwhelming majorities oppose every individual tax (as is often the case with surveys), a majority of Connecticut voters believe that “increases in taxes”  are necessary to balance the budget including a plurality of the all important unaffiliated voters which are the voters needed to win any competitive election. 

Asked “Do you think an increase in taxes is necessary to balance the budget or not? “ Democrats answered yes by a 63 – 32 percent margin and unaffiliated voters said yes by 49 – 46 percent margin.

Also interesting is that more affluent people are far more likely to believe a tax increase is necessary to balance the budget.  Those making over $100,000 agreed that tax increases were necessary by a 55-42% margin. 

Tax are not popular , however it is good news for the Governor and Legislative Democrats that people recognize that tax increases are necessary.

By re-balancing the proposed tax package to shift some of the burden from the middle class to the wealthy and then doing a better job explaining why they have selected these particular taxes, the Governor and Legislature can build the acceptance and support they crave as they look toward the next election.

Today’s Q-Poll can be found here:  CT Q-Poll March 9, 2011

NEWS FLASH – New Report Blows Hole in “Shared Sacrifice” Argument.

Connecticut Voices for Children, the New Haven-based public policy research organization has put out the most extensive assessment of Governor Malloy’s income tax proposal to date.

As has been pointed out on numerous occasions, even after the Connecticut legislature increased the income tax rate on the wealthy, Connecticut richest citizens “pay less than half the percentage of their income in state and local taxes than do most of the rest of us.

Connecticut’s low- and middle-income families pay about 10% or more of their total income in state and local taxes while the state’s top earners pay only 4.9% of  their income in state and local taxes (after accounting for Federal Tax Deductions).

The new study by CT Voices points out that while the income tax is the fairest way to raise revenues, the Governor’s proposal to totally eliminate the property tax credit “as well as increases to the sales tax make the middle class the hardest hit of any income category.”

In the end, the report shatters the notion of shared sacrifice and points to the need for the Governor and Legislature to rework the revenue side of the Governor’s budget proposal.

Continue reading “NEWS FLASH – New Report Blows Hole in “Shared Sacrifice” Argument.”

A CT State Budget Note: Revenue and Expenditures

What sources does Connecticut use to raise funds  (This year’s budget – Fiscal Year 2011)

 Source of General Fund Revenues:

 Income Tax                                       36%

Federal Funds                                   22%

Sales Tax                                             17.5%

Business Taxes                                 6.7%

Transfers from other Funds       6.3%

Gambling Revenue                         3.5%

Tobacco and Alcohol                    2.9%

Other Revenue and Taxes           5.2%

 *Other Revenue and Taxes include Inheritance Tax, Real Estate Conveyance Tax, Admissions, Licenses, permits,  Fines and of miscellaneous.

 What are the Major Growth Factors that explain the increase in expenditures (2004 – 2010)

Annual growth rate for selected key programs and categories:

Debt Service (interest/principal on bonds        5.3% average growth per year

Medicaid (Health Care)                                              5.2%

State Employee Wages and Benefits                     4.5%

Education (ECS Grant)                                               3.4%

Residential Services (group homes etc.)           6.7%

General Assistance (poverty program)             6.1%

State Funding for Higher Education                    3.4%

Think of “Shared Sacrifice” more as a term of art…

Cross-posted from Pelto’s Point (New Haven Advocate)

As more detailed analysis of Governor Malloy’s income tax proposal takes place, the public is learning that some may consider his pledge of “shared sacrifice” as a bit more rhetoric than reality. 

If adopted as is, the public will learn that the plan isn’t quite as “fair” a distribution of burden as middle-income families might have hoped.

The Malloy Plan shifts the state income tax from 3 to 8 progressive tax brackets, eliminates the property tax credit and changes (phases out) the amount of income that is taxed at the lowest 3 percent rate.

The net impact is that those making between about $50,000 and $120,000 will be surprised to learn that their income taxes will be going up by a much higher percent than those who make $120,000 to $250,000.

It’s complex to be sure, but when all the various calculations are made the impact for a the average Connecticut couple is as follows;

Amount           Percent Increase in Taxes

$60,000           38% increase in their income tax

$80,000           18% increase

$100,000         12.5%

$120,000         10.9%

$150,000         10.2%

$175,000         9.6%

$200,000         9.4%

$250,000         10.5%

$500,000         13.8%

$1,000,000      20.0%

2,000,000        10.4%

Keith Phaneuf at the CTMirror has a lengthy story on the complicated changes the Malloy has proposed.  The Legislature’s Office of Fiscal Analysis has also done some preliminary work on the impact Malloy’s plan will have on Connecticut households.

Take a look at Phaneuf’s article to learn more: http://www.ctmirror.org/story/11598/malloy-hopes-cut-through-confusing-tax-math.  His story also includes some great charts that provide addition examples of the impact Malloy’s Plan would have.

Wait, What? A Tax Plan That Would Make a Republican Governor Proud?

The CTMirror has posted a copy of Malloy’s tax plan: http://ctmirror.org/sites/default/files/documents/tax%20proposal.pdf and a corresponding story http://ctmirror.org/story/11505/malloy

More analysis to come in the coming days – but if you go outside – you’ll probably hear Connecticut’s wealthy popping the champagne bottles and toasting this tax proposal.

An new income tax rate of only 6.7% for those making over a $1 million while eliminating the all important property tax credit  — which is probably the single most important tax policy for middle-income families?

I suppose the good news is that since the top income tax rate will remain so much lower than New York and New Jersey – let alone – New York City that we can rest assured that our super wealthy won’t be selling their homes, pulling their kids out of school and heading to safe havens…

While the Administration will argue that the plan builds some “progressivity” into the income tax, it is limited at best and because it removes the all important property tax credit from the income tax it is a major hit to Connecticut’s middle income taxpayers.

Even in the worst of the previous two recessions the property tax credit was never reduced below $300 – now he is proposing eliminating it – a shocking hit to every middle class homeowner.

The plan also raises the gas tax – which disproportionately hurts middle class, working families who have no choice but to use their cars to get to work and meet the challenges of daily life. It also increases the sales tax rate and taxes clothing and non-prescription drugs…

But his does not broaden the sales tax to a variety of business services such as advertising.

We’ll know more in the coming days – but as of now – the wealthy in Connecticut pay about 5% of their income in state and local taxes while the rest of us pay about 10% of our income in state and local taxes. This plan does little (if anything) to balance Connecticut’s tax burden on middle income families.

At first blush – at least – it is a plan that would make a Republican governor proud!

The real definition of entitlement: “The belief that one is deserving of or entitled to certain privileges”

Mark Bertolini, CEO Aetna

(Cross-posted from Pelto’s Point at www.newhavenadvocate.com)

Of course, when it comes to the term entitlement many Americans think of government entitlement programs like Medicare or Medicaid. Entitlements are those government services or benefits that people receive when they meet the necessary legal criteria in order to receive such services or benefits.

However, here in Connecticut (in the year 2011), the notion of entitlement seems to be taking on a new and far more ominous meaning.

First Robert Burton wanted his $3 million dollars back from UConn and his name removed from the $48 million dollar Burton Family Football Training Complex because he was left out of the loop on the selection of a new football coach.

Now, Mark Bertolini, the CEO of Aetna announces at a recent Middlesex Chamber of Commerce meeting that whether his company will add or eliminate jobs in Connecticut will depend in part on how the state resolves its budget crisis.

See the Hartford Courant story – http://www.courant.com/business/hc-aetna-bertolini-0212-20110211,0,659887.story

Bertolini reports that “we’ve done the analysis, and, quite frankly, Connecticut falls very, very low on the list as an environment to locate employees . . . in large part because of the tax structure, the cost of living, which is now approaching, all in, the cost of locating an employee in New York City,”

That is quite a threat from Aetna – A Connecticut creation that has called our state home for 158 years.

This comes from the CEO of Aetna, whose 2010 operating earnings were $1.6 billion, up 43% from 2009.

Aetna – a major multinational corporation that proudly declares that it does business in 160 countries around the world.

Aetna – whose 2010 pre-tax operating margin was up to 8% and their post-tax margin as up to 5.2% – an increase of 1.5%.

Aetna – whose stock closed yesterday at 37.65, up from about 29 a year ago.

This past year, Mark Bertolini’s Annual Cash Compensation was $1.5 million, plus short term compensation of $932 thousand plus long term compensation of $7.2 million.  His total 2010 compensation package was worth $12.6 million

Although Bertolini fails to make clear what his specific demands are we can safely assume that his worry relates to increased taxes for his company or himself.  Does he mean that ANY TAX INCREASE will send his company fleeing?  (Has he taken into consideration the huge windfall that he and his executive team received thanks to the extension of the Bush Tax Cuts)?

Is Bertolini saying he’ll lay off his 7,000 experienced workers if Connecticut raises taxes?

Is he saying he’ll sell the company’s huge property holdings here in Connecticut?

Is he saying that he and his senior management team will pull their kids out of school, sell their homes and move out of state because Connecticut tries to balance its budget by asking those among us who can pay a bit more to pay their fair share and help ensure Connecticut remains a great place to live and raise a family.

There is something truly shocking about the arrogance that flows from comments like his.

As we face the greatest economic challenge since the Great Depression, it is amazing that this “corporate leader” uses his prestige and privilege to tell us that as our elected officials finally work to put Connecticut back on track, their actions might very well lead Aetna to turn its back on its own state..

It is comments like Bertolini’s that make me worry about the very future of our Nation.