Saturday, August 23, 2008

Fiscal Responsibility

When the economy is in a temporary downturn, it’s important for the state to focus on the basics when it comes to spending. We should stop doing as many expensive, special projects until the cycle of the economy returns to a period of healthy growth.

State Debt:
Connecticut has one of the highest debt-per-capita of any state in the nation (we’re in the bottom four). The state government has been selling too many bonds for special projects in recent years. We need to consider the effect of debt maintenance on future budgets, and reduce the number of special project bonds that we sell.

In numbers: the state government has run up $16 BILLION dollars of debt, nearly an entire year's budget! This is despite the fact that we have a balanced budget requirement. Part of the problem is that bonds are issued by the Bonding Commission, a group appointed by the governor, and not accountable to the voters. We need to require that all bonds are voted on by the state legislature, up or down, so that elected officials are held responsible for the finances of our state. We also need our elected officials to be responsible, and address this problem. When is the last time you heard one of your representatives even mention our state debt problem?

Corporate Tax Loopholes:
Corporate tax rates have been greatly reduced in Connecticut since the 1990's. Only 3.6% of Connecticut's total state tax revenues came from corporate business taxes in 2003, less than a third of what it was in 1992. (In comparison New Jersey was 12%, Massachusetts was 7.6%, New York 5.2%.) I believe they have been cut too much, and that Connecticut corporations need to pay their fair share. Connecticut should enact reasonable corporate tax reform, similar to what was passed in recent years in New Jersey, that will not drive businesses out of Connecticut, but will raise corporate tax revenues to appropriate levels.

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