Last week the Commission on Fiscal Stability and Economic Growth released a much-anticipated report that provides a business perspective on the causes and suggested responses necessary to cure our state’s economic woes. Overall, we support the report’s clear call for state investment to spur economic growth with a focus on education, workforce development, transportation, regional development, and core city revitalization. However, we fear the compressed time frame within which the Commission worked resulted in inconsistent — and in some cases unsound — recommendations, many of which are grounded in four fundamental errors. First, the vision and goals articulated at the outset of the report upon which the Commission bases its recommendations for “short-term, medium-term and long-term actions that will enable improved competitiveness and higher growth” omit any mention of the toxic impact of existing racial disparities and income and wealth inequity in the state.
The long-term fiscal stability and health of our state depend upon economic growth that affords shared prosperity to families, businesses, and communities. This kind of growth can only occur in a state that has a competitive business environment, a prepared workforce, a commitment to race equity and a fiscally sound state government. The state budget announced Monday by Gov. Dannel Malloy includes some welcome and decisive steps to narrow our long-term deficit, move the state toward fiscal stability, and tackle some of our pressing infrastructure needs. The proposal, however, fails to recommend a number of structural changes essential to grow the economy and move toward sustainable, shared prosperity.
Although Connecticut’s tax system certainly needs reform, the income tax is not at the center of its problems. Most of our revenue woes come from system full of loopholes, unnecessary tax expenditures and giveaways. Fixing Connecticut’s tax code to make it more fair, transparent and predictable would do far more to promote growth and fix our budget crisis than any income tax cuts for the powerful.
Contrary to the loud complaints of some in the corporate community, the state budget does not impose outsized demands on big business. When corporations complain of high business taxes, they are elevating fiction over fact. Let’s push back against the fear, exaggerations and misinformation and stick with the basic facts. No changes in the state budget should be considered in next week’s special session.