The new Governor of Connecticut, Dannel P. Malloy, is raising taxes, cutting costs, eliminating government jobs and increasing budgets, all with such breathless abandon that no one quite knows in which direction the state is headed. The new governor started the year with a plan to raise existing taxes and impose new taxes on more than 60 goods and services; citizens of CT already pay state and local taxes of 12%, a staggering increase from less than 6% 20 years ago, and one of the highest state income tax rates in the nation. Malloy is also eliminating 6500 state jobs (Union? My guess: non-union). We further note that Malloy forecasts an increase in spending at the same time that he proposes to close the $1.6 billion budget gap. In other words, we’re going to try to close the gap while increasing expenditures; revenues (ie, taxes) will therefore have to increase even faster than rising expenditures to catch up, a bit like Secretariat in the stretch. This will not be fun for the citizens of Connecticut. Meanwhile, as part of his $1.6 billion gap-filler, the State is discontinuing the historic and picturesque Rocky Hill-Glastonbury and Chester-Hadlyme Ferries. This will save the state $1 million (we rounded .7 million up to 1 million) out of an annual budget of $20 billion. Is this a case of being "penny wise and pound foolish?" Or is it a case of being penny foolish as well as pound foolish?
Considering that Connecticut collected no state income taxes until 1989, going from zero to 40% of the $20 billion state budget in just a little over 20 years seems like quite a lot. The Governor’s efforts to balance the budget are laudable, but $1 million is one half of one thousandth of one percent of the budgeted $20 billion. 8 of the 6500 jobs will be eliminated if and when the ferry service ends later this month.
Concerned citizens are fighting to keep the ferries afloat. After all, there is something to be said for tradition. The Chester-Hadlyme ferry has been operating since 1769, or 242 years; the Rocky Hill-Glastonbury Ferry, however, has been working since 1655, or 356 years … the oldest ferry service in continuous operation in the United States.
There is also something to be said for tourism, one of Connecticut’s remaining business sectors, to which the ferry operations contribute. Since no one can calculate the additional revenue brought to the state because of the ferries, they have become a political football … to be kicked around to raise attention … which Malloy may have had in mind all along. It focuses the public’s attention on minutiae (one half of one thousandth of one percent qualifies as minutiae) while the good governor sets a horse race in motion with his expanding $20 billion budget. In the end, he may grant the ferries a pardon, thus appearing to be the good guy while fleecing the public out of a billion dollars or so that we simply don’t need to spend.
Finally, there is something to be said about when enough is enough. Malloy’s plan involves raising an additional $2 billion in taxes in 2012 (80% from individuals, the wealthiest of whom have already re-calculated how much they can save by changing their official residences to Florida). Need I mention that $2 billion is a whopping 10% of the $20 billion budget … vastly more than one half of one thousandth of one percent. It's the $2 billion increase that should be in the news, and the value of which we should be debating.
What are the chances that Malloy’s plan will work? That he will be able to increase revenues (taxes) fast enough to meet his budget of increasing expenditures with fewer employees, without further destroying the state’s deteriorating economy? What are the chances of another Secretariat?
