The recent talk of tax cuts make sense for a news headline, but so far are not showing any sense to improve Connecticut overall. Any tax ideas ought to be part of a strategy to lower the cost of living for residents (especially the poor who pay more percent of income in taxes than the wealthy) and improve the economic outlook of the state, creating opportunity for people to better themselves.
The current proposals would function cynically and accurately as a ploy for votes that will be withdrawn before being paid out.
Connecticut has many tax studies where all show we pay very high property taxes, high income taxes, moderate sales taxes and low user fees. The popular states (Sunbelt) tend to the reverse order. Certainly for retirees and the poor, property taxes are a major concern and a major reason for people to leave the state at retirement. To address this we should reform all of our taxes with the goal of lowering the cost of just living here, while still raising the revenue required to run the state. The legislature should look at the combined delivery and cost of services for state and municipal government in their discussions, as well as the money to pay for it.
If property taxes are what drive most tax dissatisfaction, then education is the main cost driver in almost every town and city in the state. Property taxes are high to fund schools which most towns pay most expenses of, with the state contributing a large aggregate amount for mostly a poorly funded teacher’s retirement fund that is not financially sound.
Eliminating a tax makes it much harder to restore than cutting the rate, which then moves back up in the next special or regular legislative session. It would have permanence, and lowers the cost of living for all.
If there is truly money for a tax cut, then it should count in that it is noticeable to the public and makes their lives better. Tax reform of combined municipal and state spending would allow us to act strategically for the betterment of our state.
My suggestion is to rewrite the Education Cost Sharing formula so that the state covers 75% of the average cost of education for every student in every community.
Then eliminate the property tax on automobiles and personal property. It would lower the cost of utilities to everyone, it would eliminate the complaint about high costs of auto ownership, and encourage people to buy the equipment to start businesses and grow the economy. It would also use broad-based taxes to educate every child in the state, regardless of town wealth, while relieving towns of much of the burden of their most expensive endeavor.
Chip Beckett is the former Chair of the Glastonbury Town Council.