Malloy, Pelto, State Budget, Taxes Malloy, Pelto, State Budget, Taxes
In Governor Dannel “Dan” Malloy’s world of “Shared Sacrifice,” middle-income families have taken a disproportionate hit.
On the state level, Malloy’s tax plan resulted in higher state income tax rates, a reduced property tax credit, more sales taxes and the largest gas tax increase in state history. All of these taxes had a heavy impact on Connecticut’s middle class.
At the same time, rising local property tax rates also hit middle-income families especially hard.
But Connecticut’s wealthiest citizens have been given a pass.
Governor Malloy’s record-breaking 2011 tax increase failed to include any meaningful increase in the state income tax for those making more than $1 million a year.
When presenting his budget address to the Connecticut General Assembly in 2011, Governor Dannel Malloy explained,
“While I do believe in a progressive income tax, I do not believe that we should punish success, or wealth.”
Asking people to pay their fair share is not “punishing success or wealth.”
In the same year that Governor Malloy stood up and told the Connecticut Legislature that he wouldn’t raise the income tax on the wealthy because he didn’t want to “punish success,” Republican presidential contender Mitt Romney used the very same words to explain why he opposed any new taxes on the wealthiest 1% of Americans.
Malloy and Romney were both wrong.
Asking Americans to pay their fair share is what a representative democracy is supposed to do. One need only look back one hundred and fourteen years ago when Teddy Roosevelt made that clear in his famous “New Nationalism Speech” of August 1910.
While the Malloy administration claims this year’s state budget is balanced the truth is that Connecticut is facing a $1.3 billion projected deficit in the state fiscal year that begins July 2015.
While Malloy and the Republicans shove each other about whose “no tax pledge” is stronger, the reality is that a billion dollar deficit will prevent the State of Connecticut from fulfilling its responsibilities to our public schools, the level of municipal aid, the availability of vital state services and our obligations to make payments for state debt, as well as pension and healthcare payments.
As a CT Mirror story today makes clear, the financial crisis on the horizon is directly attributable to Governor Malloy’s failure to demand that Connecticut’s wealthy pay their fair share.
As the CT Mirror notes,
Former state Rep. Jonathan Pelto, a Mansfield Democrat and one of the governor’s most vocal critics, said the huge deficit Malloy has left behind still threatens the future of town aid and public-sector pensions.
Pelto, who last week launched an independent bid for governor, said had Malloy not rejected calls for a more progressive income tax, Connecticut could have municipal aid and pension fixes and a balanced budget.
“Gov. Malloy’s decision to coddle the rich by raising the tax rate on the middle class but refusing to raise the rate for the wealthy is the primary reason the state is facing this deficit,” he said.
Malloy did raise the top marginal rate on the state income tax from 6.5 to 6.7 percent, and also approved a provision ensuring the wealthiest households pay the top rate on most of their income.
But he rejected a bid from Better Choices, a coalition of public-sector unions and social service advocacy groups, who pushed for a top rate of more than 10 percent.
For those who want to understand the real story surrounding Connecticut budget problems, the latest CT Mirror story and an absolute MUST READ.
You can find it at: http://ctmirror.org/should-malloy-have-shielded-education-pensions-from-historic-ct-budget-deficit/?hvid=4e7AU
Paid for by Pelto 2014, Ted Strelez, Treasurer, Christine Ladd, Deputy Treasurer, Approved by Jonathan Pelto
Gubernatorial Election 2014, Malloy, State Budget, State Deficit, Taxes Gubernatorial Election 2014, Malloy, State Budget, State Deficit, Taxes
The truth is that Connecticut is facing a projected state budget deficit of at least $1.3 billion dollars for the fiscal year that begins after this year’s gubernatorial election.
But today Governor Dannel “Dan” Malloy boldly announced… “We don’t face a deficit.”
In a late afternoon CT Newsjunkie story entitled, Malloy Dismisses Deficit Projections, Won’t Ask for More Concessions, the Governor not only explained that the deficit was going to disappear but he took the opportunity to repeat his iron-clad pledge that he will not propose or accept any new taxes in a second term.
As Malloy explained, “There will not be a tax increase.”
And to top things off, Malloy said that he was ruling out asking state workers for more concessions should he be re-elected as Connecticut’s Chief Executive Officer.
While the Governor’s hyperbole is impressive, there is not a state employee, retirees, public school teacher or retired teacher, let alone a public official or taxpayer who believes that Malloy’s portrayal of reality is accurate.
Hearing about Malloy’s remarks, one can’t help but dwell on that classic idiom about pigs flying or the one about Hell freezing over.
Or for that matter that one we used as kids that always got a good laugh and referred to the possibility of monkeys flying out our butts.
For the latest on Malloy’s economic theories check out the CT Newsjunkie story at: http://www.ctnewsjunkie.com/archives/entry/malloy_dismisses_deficit_projections_wont_ask_for_more_concessions/ and the Hartford Courant story at: http://courantblogs.com/capitol-watch/malloy-promises-no-new-deficit-rejects-new-state-worker-givebacks/
Budget Cuts, Healthcare, Hospitals, Layoffs, Malloy, State Budget, Taxes Budget cuts, Healthcare, Hospitals, layoffs, Malloy, State Budget, Taxes
When Governor Malloy proposed his bait and switch “provider tax” strategy he promised hospitals that they would be “held harmless.” The goal he said was simply to maximize federal reimbursement rates.
But two years later, the impact of Malloy’s decision to renege on that promise is leading to massive layoffs and undermining many of Connecticut’s hospitals.
The news headlines have been shocking;
“The state’s 30 acute care hospitals have shed 1,400 jobs in the past year”
“Hartford HealthCare is eliminating 350 jobs”
“Nearly 70 positions at The William W. Backus and Windham hospitals will be eliminated”
“List shows 176 Connecticut layoff notices so far (Norwalk Hour)”
“116 positions will be eliminated as a result of state budget cuts (Danbury News-Times)”
St. Francis Hospital and Medical Center is reducing the staff at its pediatric and adolescent clinic
“The layoffs announced Monday are the second round in the last seven months. In November, Hartford HealthCare laid off 179 employees, including 10 each at Backus and Windham.”
So why are people being thrown out of their jobs when access to quality healthcare is more important than ever?
Malloy’s “provider tax” budget gimmick is a major factor.
When Malloy proposed his $1.5 billion tax increase in 2011, the plan also included an additional $350 million “provider tax” on hospitals. Malloy claimed it wasn’t really a tax because the hospitals would get all the money back and the federal government would reimburse the state for a portion of that money.
Of course, to the self-pay patient, it was a tax.
And to the health insurance company it was yet another cost to be passed on to the people who pay for health insurance.
But the General Assembly approved Malloy’s plan anyway.
As part of his state budget coverage, CT Mirror’s Keith Phaneuf wrote last year,
“And then there’s really bad news: Gov. Dannel P. Malloy would cut their state funding by one-fifth over the next two years.
Put it all together, hospitals say, and at best, they will cut jobs and services. At worst, some will shut their doors. And facilities in the state’s poor northeastern corner say they are particularly at risk.”
The fact is that while the Malloy administration did pay the hospitals back the first year, his budget REDUCED the amount Connecticut hospitals received by about $27 million in the second year, $134 million the third year and $269 million in this year’s budget.
Overall, as a result of Governor Malloy’s budget strategies, while hospitals are being paid for additional Medicaid services, the State of Connecticut has reduced funding for its 32 chronic care hospitals by about $400 million dollars in the last two years alone.
The massive number of layoffs are proof that the “chickens are coming home to roost.”
And, none of this is a surprise to Malloy and the legislature.
As the Vice President of the Connecticut Hospital Association said,
“In short, what started 18 months ago as a scheme to help balance the state budget … has been converted to an unadulterated tax on hospitals…It’s one thing not to help hospitals, it’s something completely different when you harm hospitals. “Taking patient care revenue to balance the state budget is just plain wrong.”
The state cuts to hospitals garnered some notoriety last spring when Malloy lost his temper on the WNPR radio show, “Where We Live,”
The CT Mirror reported at the time,
When Malloy appeared on May 6 on WNPR’s public affairs show “Where We Live,” he responded quickly when host John Dankosky asked about the hospital funding reductions the governor’s own budget staff wrote about in his budget.
“Let me stop you right there,” Malloy told Dankosky about four minutes into the program. “There aren’t cuts to hospitals.”
The administration insists that while the hospitals lose $400 million in tax reimbursements, they will make it back. But to do so, hospitals will have to treat thousands more poor patients covered through Medicaid.
“It is time for people to trim their sails, to find ways to deliver great service at less expense,” the governor said, adding that all hospital-related state spending should be $1.7 billion next fiscal year, just as it is this year. “We’re not cutting, we’re funding.”
What Malloy forgot was the evidence of the cuts was part of his own budget documents.
Again quoting the CT Mirror,
When the administration unveiled its latest budget plan in February, it initially referred to those changes in hospital reimbursements as spending cuts.
“The decision to reduce hospital funding was not an easy one,” the governor’s budget introduction states.
While the overall policy is rather complex, the impact has been pretty simple. The way Malloy has handled the state budget is a primary factor behind the hospital layoffs that are taking place across the state.
The families that are being devastated by these hospital layoffs and the communities being impacted by reduced levels of services should tell Governor Malloy that at the very least, he must take responsibility for the actions he took that are now leading to many healthcare workers losing their jobs.
You can read the CT Mirror’s coverage of this issue here: http://ctmirror.org/hospitals-warn-budget-cuts-will-cut-jobs-and-services-maybe-close-doors/ and here http://ctmirror.org/semantics-malloys-no-tax-pledge/
Gubernatorial Election 2014, Malloy, Mayor Bill Finch, Taxes Gubernatorial Election 2014, Malloy, Mayor Bill Finch, Taxes, Webster Bank Arena
As the 2014 Session of the Connecticut General Assembly came to a close two weeks ago, the $55 rebate that Governor Malloy had promised disappeared….
So did the promised tax break for retired teachers, and the tax break on clothing costing less than $50, and the tax break on over-the-counter, non-prescription medicines and the list goes on.
At Malloy’s direction, the legislature “pushed off” a total of $220 million in promised tax breaks.
And Connecticut’s citizens are now coming to the grim realization that those tax breaks may be gone for good, since Malloy’s new state budget morphs into a $1.3 billion deficit in the year following this fall’s election.
But it turns out, not everyone lost their tax break.
In fact, it turns out that at least one person get a brand new tax break.
Enter Howard Saffan.
Howard Saffan is a Weston, Connecticut resident. He is a lawyer, real estate investor, and President of Harbor Yard Sports and Entertainment (aka The Webster Bank Arena), as well as, the Bridgeport Sound Tigers.
When Bridgeport Mayor Bill Finch tried to persuade Bridgeport voters to change the City’s charter to eliminate their democratically elected board of education and replace it with one that he would appoint, Saffan’s Harbor Yard Sports and Entertainment Company donated the maximum allowable amount of $14,440 to help fund Finch’s failed effort.
Today, if you drive by the Webster Bank Arena, you’ll see a massive new electronic billboard that the Finch administration quickly pushed through the local zoning process, over the objection of other billboard companies. The new Harbor Yard billboard often displays Mayor Finch’s face, along with a welcoming message.
But Howard Saffan’s financial generosity goes beyond Mayor Bill Finch. On September 27, 2013, Saffan wrote a check for $10,000 to the Connecticut Democratic State Central Committee’s federal account.
The Connecticut Democrat’s account is one of the mechanisms that Governor Malloy’s political operation is using to “legally” circumvent Connecticut’s campaign law.
Although a candidate who participates in Connecticut’s public finance system may not accept donations in excess of $100, may not take funds from political action committees and may not accept campaign contributions from state contractors, Malloy and the Democrats in the legislature created a massive loophole that allows Malloy to re-direct these types of illegal contributions to the Democratic Party’s federal account. Once successfully laundered, these funds can then be used to augment the $6.2 million in taxpayer funds that Malloy he will be receiving to pay for his “official” 2014 gubernatorial campaign.
And as a result of the change in law, contributors can now give up to $10,000 in each calendar year.
And the Webster Bank Arena’s Howard Saffan is one of those who have join the growing list of people who have written out $10,000 checks to this Democratic account.
Now let’s return to the last night of the 2014 Session of the Connecticut General Assembly.
As the legislature approached its midnight deadline, the Connecticut House of Representatives adopted a massive, 260 section “budget implementation” bill 11:17 p.m. The State Senate adopted the legislation at 11:47.
Few, if any, legislators really knew what was in this bill, but since it “implemented” the $20 billion dollar budget that had been passed a few days earlier, Democrats dutifully hit the “green” button and the legislation easily passed.
Toward the end of the bill, in Section 225, is a section of the statutes that requires that every “place of amusement, entertainment or recreation” charge a ten percent admissions tax.
The statute also includes a short list of types of locations that are exempt from having to charge that tax.
And if any legislator had actually read all the way to Section 225, they would have discovered that, without any public debate, “the Webster Bank Arena in Bridgeport” was slipped into the list of Connecticut venues that DO NOT HAVE TO CHARGE the 10 percent admissions or entertainment tax.
The result of Section 225 is that Howard Saffan and his Webster Bank Arena is better positioned to beat out its competition because it doesn’t have to add the 10 percent admission tax to all of its tickets.
And the taxpayers of Connecticut?
They are out $625,000 a year in lost revenue!
Let that be a lesson to all of you who thought you were getting that $55 rebate or any of the other election year tax breaks that Governor Dannel “Dan” Malloy had promised.
Gubernatorial Election 2014, Malloy, State Budget, State Debt, State Deficit, Taxes Malloy, State Budget, State Debt, State Deficit, Taxes
As a result of Governor Malloy’s gimmick ridden state budget, the candidate who wins the 2014 gubernatorial election will take office facing a projected state budget deficit of $1.3 billion or more.
By using one-time revenues for on-going expenses, purposefully under-funding various government programs and utilizing a series of budget gimmicks, the new 2014-2015 state budget is just about as irresponsible as they come.
The moment Malloy signs it into law he will be creating a budget deficit for this year and a catastrophe in the budget that will follow.
But as irresponsible as Malloy’s latest budget is, nothing compares to the damage that will come with his recent “NO TAX” pledge should he be elected to a second term. Malloy sealed his fate when he recently told reporters that he would, “neither seek nor accept any further tax increases” in a second term.
Pandering to phantom voters, Malloy has engaged in a George Bush “read my lips” moment.
By making an “ironclad” NO TAX increase pledge, Malloy joins the Republican candidates in assuring that the people of Connecticut must live with a tax system that crushes the middle class while coddling the rich.
As Malloy knows, Connecticut’s middle income families pay about 10 percent of their income in state and local taxes, the poor pay about 12 percent and the rich pay about 6 percent of their income in state and local taxes.
Instead of pledging to be fiscally responsible or even pledging not to increase taxes on middle-income families, Malloy has made it clear that he will continue to protect the rich, even if it comes at everyone else’s expense.
Perhaps the Governor wants Connecticut taxpayers to forget that his 2011 $1.5 billion tax increase raised the income tax rate for middle-income families while those making more than $1 million saw no increase in their income tax rate at all.
Malloy’s pledge will to protect Connecticut’s wealthy will have devastating consequences should he win in November.
The harsh reality is that as result of Governor Malloy’s failure to properly fund public education, the one thing we know about a NO TAX pledge at the state level is that it will lead to higher local property taxes and that will create a tax structure that is even more regressive.
Malloy’s irresponsible promise on taxes not only means Connecticut’s wealthy will get richer while failing to pay their fair share, but it will force our state government to further abdicate its responsibilities.
Even the most rosy revenue estimates or dreams of a renewed economy will not provide the revenue necessary to maintain vital state services during a 2nd Malloy term.
As noted, four more years of inadequate state funding for education will mean higher property taxes and reduced resources to provide Connecticut’s children with the knowledge and skills needed to succeed.
Four more years of inadequate funding for Connecticut public colleges and universities will shift even more of the costs on to students and parents and will prevent many from even getting the college education they need to lead fuller lives, be self-sufficient and help build our economy.
Four more years of inadequate funding will undermine Connecticut health and human service programs, pushing some of the state’s hospital out of business and leaving many Connecticut citizens without the vital services they need.
Four more years of inadequate funding will devastate state agencies that are already understaffed and will, yet again, unfairly target state employees.
And perhaps most importantly, four more years of inadequate funding will prevent the state of Connecticut from confronting and reducing the overwhelming debt that Malloy and previous governors have built up – that being a maxed out state credit card, insufficient funding of the state and teacher pension funds and insufficient reserves to pay for the state health care retiree accounts.
While many in Connecticut were already questioning Dannel Malloy’s priorities and legacy, his “no tax” pledge ensures that his place in history will be that of just another politician who put his own political aspirations ahead off what was best for the state of Connecticut and its citizens.
Corporate Welfare, Gubernatorial Election 2014, Human Services, Malloy Corporate Welfare, Gubernatorial Election 2014, Human Services, Malloy, Taxes
Newspaper headlines in today’s Stamford Advocate:
Street bonuses heat up January real estate market in Greenwich, Darien
Stamford homeless shelters over capacity
In 2013, the stock market hit “52 all-time record highs” and had its best year in 18 years. As a result, Greenwich realtors report the sales of high priced homes is booming. As one realtor put it, “Traditionally, the markets in Greenwich — and neighboring towns such as Darien — have seen significant booms in the early months of the year, after those working on Wall Street receive their bonus checks.”
Meanwhile, just a few miles down the road, the spokesperson for Inspirica, a Stamford based non-profit that runs a homeless shelter for women and supportive housing program for families reported, “We are over capacity…We’re working at 116 to 120 percent capacity. Because it’s so cold, we’re not going to turn people away.”
This is Connecticut, where Democratic Governor Malloy’s 2011 record tax increase disproportionately hit the middle class while those making over $1 million saw no increase in their income tax rate – at all! Malloy’s claim was that if we didn’t coddle the wealthy, they might leave and move to New York state, New York City or New Jersey (where tax rates are even higher).
This is Connecticut, where Democratic Governor Malloy’s “economic development” strategy consists of giving successful, multi-million dollar businesses scarce public funds while failing to provide state agencies and towns with the money they need to even maintain existing services, let alone address the ongoing and growing impact of the Great Recession.
A case in point: with much fanfare Democratic Governor Malloy gave Bridgewater Associates a publicly funded corporate welfare deal worth over $110 million dollars so that they could move their headquarters from Westport to Stamford. In 2012, Ray Dalio, Bridgewater Associates’ CEO was paid $2.3 billion (that is billion with a B) making him the highest paid CEO in the world.
At the same time Democratic Governor Malloy and the Connecticut General Assembly failed to provide sufficient funds or personnel to maintain the current level of services for most human service programs provided by the state of Connecticut, non-profit agencies or at the town level.
Put aside Malloy’s devastating initiatives that are undermining Connecticut public education system.
Forget that Malloy has left state government so understaffed that services aren’t being provided in a timely manner in many agencies.
Put aside the fact that Malloy instituted the deepest cuts in state history to Connecticut’s public colleges and universities, cuts that have forced tuition up and sifted even more of the burden of an undergraduate education onto the backs of Connecticut students and their families.
Forget that Malloy is proposing a mini election-year tax cut to try to persuade middle-income families to vote for him this November, despite the fact that Connecticut is facing a combined $3.2 billion budget deficit in the three years following the election.
When the truth is revealed, the fact is that Democratic Governor Malloy has helped push Connecticut so far off the right track that we can’t even see the path back to fairness, equity and economic stability.
Corporate Welfare, Economic Development, Economy, Gubernatorial Election 2014, Malloy, Presidential Election of 2016, Taxes, Will Rogers Corporate Welfare, Gubernatorial Election 2014, Malloy, Taxes, Will Rogers
“I was born on Nov. 4, which is Election Day. . . . My birthday has made more men and sent more back to honest work than any other days in the year.” – Will Rogers
There was a time in our nation’s history when one out of three Americans followed the writings of a single newspaper columnist. More than forty million Americans would read his pieces. Will Rogers wasn’t a radical or left-wing agitator, although he’d probably be labeled one if he was around today.
Will Rogers was a newspaper columnist, writer, humorist and cowboy. He was a folk hero and a truth-teller.
In early 1931, as the country collapsed under the weight of the Great Depression, Will Rogers wrote an article entitled “Let’s Give Every Man a Job That’s Out of Work!”
One could call it an eerily perceptive commentary on the Republican’s trickle-down economic theory or Governor Malloy’s belief that if we limit tax increase on the rich and just give out more corporate welfare, the economy will turnaround. (Wait, What? readers will recall that under Malloy’s $1.5 billion tax increase in 2011, the income group that DID NOT see any increase in their tax rate were those making more than $1 million-a-year).
Back in 1931 when it came to the issue of fair taxation, Will Roger’s wrote:
“Course the big man’s argument, and all the heavy Taxpayers’ alibi is that when you take too big a slice from a man as taxes it takes that much more out of his investments and might cut down on money being put into enterprises. But it didn’t work that way after the war, and during it why income taxes run as high as seventy percent on every dollar earned, and yet there was more money being made and put into things than there is now.”
“This is becoming the richest, and the poorest Country in the world. Why? Why, on account of an unequal distribution of the money.”
“Now that we got that settled all we have to do is get by Congress and see if the Republicans will vote a higher Income tax on the rich babies. It might not be a great plan, but it will DAM sure beat the one we got now.”
Speaking the truth was one of Will Roger’s many strong points.
And he was fearless when it came to that task.
In an October 18, 1931 national radio broadcast that became known as the “Bacon, Beans, and Limousines” speech, Rogers laid out the truth once again. (A video of the speech can be seen at: https://www.youtube.com/watch?v=kyfvamwM4Yo).
Rogers told the people of the United States;
“Now we read in the papers every day, and they get us all excited over one or a dozen different problems that’s supposed to be before this country. There’s not really but one problem before the whole country at this time… The only problem that confronts this country today is at least seven million people are out of work. That’s our only problem.”
“[We must] see that every man that wants to is able to work, is allowed to find a place to go to work, and also to arrange some way of getting more equal distribution of the wealth in the country.”
“You know, there’s not a one of us that has anything that these people that are without it now haven’t contributed to what we’ve got. I don’t suppose there is the most unemployed or the hungriest man in America that hasn’t contributed in some way to the wealth of every millionaire in America. It wasn’t the working class that brought this condition on at all—it was the big boys themselves who thought this financial drunk we were going through was going to last forever. They over-merged, and over-capitalized, and over-everything-else. That’s the fix that we’re in now.”
We need another Will Rogers now more than ever.
But in the end, if there is any chance of changing course, its rests in our hands … and it is called the gubernatorial election of 2014 and the national election of 2016.
Corporate Welfare, Malloy, Taxes, Unemployment Malloy, Taxes, Unemployment
Governor Malloy calls on Federal Government to pay unemployment benefits for Sikorsky shutdown adding its “unacceptable that Connecticut taxpayers be made to pay for the failures of Republicans in Washington.”
It is unacceptable for Connecticut taxpayers to be paying for the failure of Republicans in Washington, but the Sikorsky situation isn’t the right example. And don’t get me wrong, I want to blame the Republicans for absolutely everything too.
However, as Governor Malloy reveals in this situation, losing contact with the truth undermines the effectiveness of one’s rhetoric;
According to a blog post written by Stamford Advocate and Hearst Newspaper Group reporter, Brian Lockhart, “Democratic Gov. Dannel Malloy Friday said he wants the federal government to fully reimburse Connecticut and all states for the cost of unemployment benefits and administering those benefits to workers impacted by the government shutdown.”
Lockhart writes that, “In Connecticut Malloy was referring specifically to Sikorsky Aircraft in Stratford, which Wednesday announced will furlough about 2,000 workers, effective Monday.
The company said the inability of Congress and the White House to reach a federal budget agreement and end the government shutdown has severely hampered its ability to manufacture and support helicopters used by the military.”
Lockhart quotes Malloy as saying, “These workers and many more throughout Connecticut are out of work because House Republicans insist on playing childish political games. Families are suffering, and it’s unacceptable…As many of these workers begin applying for unemployment benefits, it’s also unacceptable that Connecticut taxpayers be made to pay for the failures of Republicans in Washington.”
Three cheers for the condemnation of the Congressional House Republicans.
Right on about the fact that it is unacceptable that families are suffering as a result of the idiotic political maneuvers of the Congressional House Republicans.
But Malloy’s statement about Connecticut taxpayers picking up the tab for the unemployment benefits is exactly the reason so many small business people think many Democrats simply don’t understand what owning a small business is all about.
Having paid my share of unemployment taxes for my employees let me take a shot at explaining to Governor Malloy how things work when it comes to unemployment taxes.
Unemployed workers are paid benefits from a fund that is paid for by businesses, not directly by state government and its taxpayers.
Employers pay federal and state unemployment taxes. These funds are used to pay for the operation of the unemployment system and the benefits that go out to unemployed workers.
The amount of unemployment tax a Connecticut business pays depends on the number of employees they have and the company’s history of creating unemployed workers. A business is charged a base rate, but if it lays off workers due to a lack of business, that unemployment tax rate increases.
With Connecticut’s unemployment rate stuck at about 9 percent for so long, Connecticut’s unemployment fund, like those in most states, run out of money and the states had to borrow money from the federal government to meet their obligations when it came to paying unemployment benefits.
The Great Recession was so bad that as of two and half years ago, more than 30 states, Connecticut included, had already borrowed more than $41 billion from the federal government.
That money must be paid back, with interest, and the way it is paid back is by charging businesses a higher federal unemployment tax. Experts have reported that even at the higher rate, it may take Connecticut more than a decade to pay back the money that Connecticut has already been borrowed.
That isn’t to say we shouldn’t be upset about the Republicans and their antics, but the money for unemployment benefits that are resulting for their stupidity is actually being paid for by Connecticut’s businesses that are already burdened with trying to pay back the money Connecticut had to borrow to pay for unemployment benefits over the last few years.
If the governor wants to lobby the federal government to help Connecticut’s businesses he should be demanding that the President and Congress do something to reduce the burden for those states that had to borrow billions.
Small businesses are the foundation of Connecticut’s economy. Governor Malloy has spent hundreds of millions on corporate welfare to “persuade” successful businesses to add a few hundred jobs in Connecticut. Instead of wasting money on those big ticket items, state government should be focusing in on ways to help small business succeed.
The unemployment tax issue is a perfect example and that problem isn’t resolved by demanding that the federal government pay for Sikorsky’s unemployment benefits for the next few weeks.
Gas Tax, Malloy, State Budget, Taxes Gas Tax, Malloy, State Budget, Taxes, Wyman
On Thursday, Governor Malloy and Lt. Governor Wyman held a press conference to address issues surrounding the newly adopted state budget. Malloy told reporters, “I think that there are no taxes in this budget that were not present previously…There are no new taxes.”
That is, the Governor is suggesting that the following are not “new taxes”…
- The largest gas tax increase in Connecticut history that will take effect on July 1, 2013. At present wholesale prices, the additional gas tax will add about 4 cents per gallon. This increase will bring in about $60 million to Connecticut’s Transportation Fund. However, as the CT Mirror noted, “the new budget then shifts $91 million from that fund into non-transportation programs next fiscal year.”
- $17.5 million more from extending the $2.50 per megawatt-hour tax on power plants from July 1, 2013 to October 1, 2013 (Malloy had wanted a 2 year extension).
- $44 million more in FY14 and $74 million more in FY15 due to retaining the 20 percent surcharge on the corporation tax that was supposed to end on July 1, 2013.
- $27 million more each year as a result of keeping the cap on an insurance premium credit program for businesses.
- The state will also have an additional $21 more next year by reducing Connecticut’s Earned Income Tax Credit from 30 percent of the federal EITC to 25 percent. It would then go to 27.5 percent in the second year of the budget.
- As the CT Mirror also reported, the new budget has a huge impact by re-directing the money that was coming in as a result of a tax on hospital bills. “Hospitals have been paying $350 million a year through a provider tax since July 2011. But the state had been reimbursing hospitals for all of those dollars, using the tax as a mechanism to qualify for more federal health care assistance. This new budget reduces aid to hospitals by more than $500 million in total over the next two fiscal years, including about $400 million cut from the grants used to reimburse hospitals for the provider tax they pay.” (CT Mirror)
- And approximately $31 million in new state revenue as a result of allowing Keno in Connecticut bars and restaurants. (The $31 million is after the Compact with the Mashantucket Pequot and Mohegan tribes are modified to provide each tribe with 12.5 percent state’s Keno proceeds.)
In addition, the two-year budget is balanced by shifting money to the state’s General Fund that was supposed to be used for particular purposes and paid out of dedicated funds:
- $25 million from the banking fund.
- $12 million the tobacco and health trust fund.
- $35.4 million from energy efficiency programs.
- $35 million from CRRA (the quasi-public trash authority).
- $10 million from a stem cell research fund (But the state will barrow an additional $10 million for that research.
- $1 million from the probate court fund.
- And the new budget also utilizes this year’s entire $221 million projecting surplus, instead of using it to pay down outstanding debt.
Budget Cuts, Human Services, Malloy, State Budget, Taxes Budget cuts, General Assembly, Human Services, Malloy, State Budget, Taxes
Over the weekend, there was a heart-wrenching commentary piece in the Hartford Courant that was written by the father of a 28-year-old intellectually disabled daughter.
His daughter’s name is Katie and he wrote, “She lives at home with my wife, Donna and me. She is the love of our lives and we embrace the gifts she brings to us and to all who know her.”
His piece was entitled, “Amid Stark State Cuts, A Father’s Plea: Who Will Care for Katie?”
Katie’s father reported that “Last November, the governor exercised his rescission authority and, without notice, reduced funding for people with disabilities who receive residential and day services. Making these cuts permanent, as proposed, delivers a body blow to vital assistance Katie receives from the Department of Developmental Services through organizations such as HARC. The latter is a long-respected family organization that provides critical services for people like Katie. It was founded by parents like me as a self-help group, at a time when institutionalization was the only choice for help. The splendid people at both these agencies are a blessed lifeline for my daughter and others.”
While every Connecticut resident, and especially every elected official should read the full article, it is easy to understand his core message.
There are useful state services, there are important state services, there are vital state services and then there are essential state services.
The services that Katie and her family receive are truly essential.
These services are essential, not only because we hold ourselves out to be a humane and caring society, but because the cost of respite and day services allow thousands of our fellow citizens to live at home rather than in far more costly institutions.
These are services that government provides because it is the right thing to do.
There are also services that when cut define the notion of being pennywise and pound foolish.
No governor, Democrat or Republican should have cut those services, but Governor Malloy did.
No Legislature, Democrat or Republican should have allowed those cuts to go forward, but Connecticut’s legislature did.
Reasonable people can have reasonable discussions and debates about appropriate levels of taxes and services, but a stunning large number of the cuts in Governor Malloy’s rescission package and the deficit mitigation package that he proposed and the legislature passed with bi-partisan support were not reasonable.
Those cuts passed because few legislators took the time to study the package and fewer still had the courage to stand up and say no to this governor.
Over the next 90 days the Connecticut General Assembly will be reviewing Malloy’s budget proposal for the next two fiscal years.
There is truly no excuse for aspects of what Malloy has proposed and even fewer excuses for the legislature to accept them.
Take a moment to read this father’s piece and know that it is just one example of budget cuts that have been made or are being contemplated that leave some of our most vulnerable fellow residents without the help and support they so deeply need and deserve.
Government officials will only respond when they know that their constituents will hold them accountable for their actions.
It is essential that our elected officials understand that that is exactly what we are going to do.
You can read the commentary piece at: http://www.courant.com/news/opinion/hc-op-duffy-who-will-care-for-katie-0303-20130301,0,7996231.story