From the Capitol / State Rep. John Hetherington
Published 6:59 pm, Wednesday, January 26, 2011
It is January and the natural landscape looks different. So does the political landscape in Hartford. As a result of the elections last November, Connecticut's governor is a Democrat. Republicans gained 14 seats in the House of Representatives and one in the Senate. So the Democrats now dominate in the House 100-51 and 23-13 in the Senate. A total of nine Democrats did not take their seat in the General Assembly on Jan. 5.
Eight were instead appointed to positions in the executive branch and one was arrested. Elections to fill these vacancies are scheduled for February 22.
None involve Wilton or New Canaan.
The Democrats no longer have a veto-proof margin in the General Assembly. But with the majority and the governor of the same party, it may not matter. Then again, it may. The fiscal challenge of billions in annual deficits and long-term debt looms so large that there is no room for partisanship. The governor will have to make tough calls, possibly unacceptable to some legislators of his own party, and he may need Republican support to make those calls stick.
Governor Malloy is expected to present his budget on Feb. 16. With Connecticut's personnel costs, including benefits, exceeding 30 percent of the budget, asking public employees for sacrifice is virtually unavoidable. Organized labor is a major part of the governor's political base, which could makes his job impossible. Or maybe not, if we follow the Nixon-to-China logic.
Tax increases are sure to be on the table, including the income tax. The income tax is the state's biggest revenue source. An income tax increase impacts Fairfield County particularly since its taxpayers pay more than 45 percent of the total take. It is interesting that our income tax revenue generally tracks the S&P, suggesting that taxable income in Connecticut is largely not generated by activity in Connecticut. It would be great to see evidence of income being generated from jobs and the creation of value right here.
The second biggest revenue source is the sales tax. That presents a temptation, especially since our sales tax at 6 percent is lower than surrounding states. We may see an increase proposed, coupled with a broadening of its application to all kinds of services currently exempt.
With deficits of $3 billion to $4 billion each year forecast, and unfunded liabilities piled up over $50 billion, we cannot simply tax our way out of this crater. Before we talk about new taxes, we should absolutely insist that every possible savings has been exhausted. Otherwise we just set the stage for a repeat performance a few years from now.
We all have to wish Governor Malloy well as his success is vital to the future of Connecticut. We on the Republican side will work to advance good ideas, no matter whose name they carry.