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With the adoption of a new state budget this week, cuts in the state’s personal income tax are on the way. “This is not a temporary tax cut,” Governor Lamont says. “It is designed to be sustainable for years to come.”
Permanent tax cuts? The governor was silly to suggest it. Connecticut may count on the income tax cuts for a year or so, but nothing in government is permanent except taxes and the desire of the government class to raise them.
That the General Assembly’s votes on the budget were overwhelmingly bipartisan, with most members of the Republican minority concurring with the Democratic majority, indicated that the damage the budget does to the productive class is expected to be small. But enthusiasm for the budget is misplaced.
For while the income tax cuts will be highly visible, budgets are adept at raising government’s costs largely out of sight. Even as the budget cuts personal income taxes, it extends for three years the 10% surcharge on the corporate income tax, which was to expire this year. This extension is expected to raise $150 million, offsetting some of revenue losses from the personal income tax cuts.
The corporate income tax surcharge was enacted in 1989 and has been changed, eliminated, and reinstated many times since. There has been nothing permanent about it. Extending the surcharge is always available when state government wants to make a show of cutting taxes elsewhere.
Other legislation may enable state government to force businesses to raise prices, constituting a de-facto tax increase that few people will understand because it is hidden in the cost of living.
The budget raises state spending substantially, estimated at 7% over two years, and will keep the machinery of government operating happily and satisfying most of government’s dependents, except the most exploited — the employees of the nonprofit organizations that do most of government’s social work, people who long have been paid poorly and denied raises.
The budget will spend more in many area, like education, where the new spending — mostly for employee compensation — is as always euphemized as “investment” instead of acknowledged as political patronage.
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But the budget is not likely to have much effect on Connecticut’s two biggest problems.
The first problem is the collapse of education, as signified by the sharply declining proficiency of students and even the decline in attendance. In debate the other day state Sen. Douglas McCrory, D-Hartford, noted that only four school districts in the state have student proficiency rates of 80% or higher. Many school districts and nearly all urban districts have proficiency rates below 50%, and proficiency was crashing long before the recent virus epidemic. But state government still affects to believe that merely throwing money at teachers ensures learning, though Connecticut has been doing that without achieving improvement since passing the Education Enhancement Act in 1986.
The second big problem is Connecticut’s worsening poverty. New programs aiming to alleviate poverty are enacted every year and yet living standards in the cities continue to fall. The murders and other violence there, increasingly involving young people, are rising, and there is so much gun crime that cities now have “shot spotter” systems so police can get to crime scenes faster.
City streets have become so anarchic that, under legislation just passed, cities soon may install surveillance systems to issue fines for traffic violations like speeding and running red lights and stop signs. Despite charges that such surveillance systems are racist, even minority-group legislators from the cities supported the legislation, acknowledging that reckless driving is both disproportionately committed by and most dangerous to their own constituents.
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But it’s not just the cities that are falling apart.
Many areas of the state have seen the brazen street takeovers, more reckless and wrong-way driving, rising homelessness and drug addiction, declining attendance in school, more children with negligent parents, the sawing and theft of catalytic converters, and so forth. People who aren’t state legislators can sense the social disintegration.
Whatever is causing it, state government isn’t asking, and tax cuts won’t stop it.
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Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net.)