With a deficit approaching 20 percent of its annual budget, Connecticut has been threatened with further cuts in state workers and the services they provide.
But according to Maggie Adair, “severe cuts will hurt Connecticut’s families and the chances for an economic recovery.” Adair was speaking at a press conference organized by the Better Choices for Connecticut coalition on February 10. The Coalition released a report that “outlines revenue solutions to address the budget deficit, avoid damage to the flagging economy, sustain good jobs, support families, and maintain Connecticut’s quality of life” according to Adair.
The coalition, made up of nonprofit providers, public service workers, and community and advocacy organizations, called on the governor and legislators to adopt the measures proposed in their report to help maintain vital public services during the recession when they are needed most – including education, health, housing, job training, public safety, environmental protection, and transportation systems.
The Better Choices proposal could balance Connecticut’s budget with minimal cuts in state services. And while some tax increases would fall on working people, Better Choices calls for making the tax system fairer by placing most of the burden on wealthy individuals and large corporations. The coalition points out that “Connecticut’s wealthiest families pay a much smaller share of their income in state and local taxes (4.9 percent) than middle income families (9.9 percent) and low-income families (12 percent).”
They propose progressively higher taxes on the portion of income over $150,000 with a top rate of 8.95 percent on income over $2 million – slightly lower than New York and New Jersey. They also propose a temporary surtax on very-high-income households to partially recapture the windfall from continuing the Bush-era tax cuts. At the other end, an Earned Income Tax Credit is proposed for low-income residents. Together, these measures would increase revenue by at least $1.4 billion – more than one-third of the state’s deficit. These measures would increase taxes for the richest 15 percent of residents (with the biggest increases on fewer than 5 percent), and would actually reduce taxes for up to one-third of residents.
A series of proposals target loopholes and inconsistencies in the sales and corporate tax structure. These include tax subsidies to corporations, sales tax exemptions that “amount to little more than targeted giveaways to narrow interest groups,” and various loopholes which discriminate against local business by giving advantages to large, multi-state corporations.
Last November, Dannel Malloy was elected as the first Democratic governor in twenty years. The unions and community organizations that make up the Better Choices coalition provided essential support in Malloy’s narrow victory. The new governor has avoided the verbal attacks on public sector unions common in many other states, and has said he would avoid further cuts in state aid to local school districts. But his budget proposals are less progressive than those of the Better Choices coalition, and include large sacrifices by state employees and cutting the budget by $1.8 billion – about 10 percent – below current service levels.
Corporate forces like the Connecticut Business and Industry Association and the Republican leadership are demanding spending cuts, and resisting any efforts to make corporations pay their share. The Better Choices proposal represents the most progressive option on the table, and is by far the best deal, not only for state workers, but also for all low- and moderate-income families in Connecticut. This reflects the organizations that make up the coalition, which include many of the state’s major unions, community organizations, and advocacy groups. The ability of these organizations to mobilize their memberships in support of the progressive alternative can be a decisive factor in determining the outcome.
Photo: Protestors demonstrate in Hartford, Conn., against threatened budget cuts. Art Perlo/PW.