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Tuesday, July 22, 2014

Valentine: Connecticut's woes proving to be cautionary tale

Friday, July 8, 2011

I was reading a piece in the New York Times on Connecticut and its financial woes. A recurring refrain kept popping up -- "20 years ago." "No state had more resources and did less with them over the past 20 years," said one former Democrat candidate for governor. Another passage references a "20-year labor agreement" negotiated by the governor. Another notes, "after two decades of stagnation."

Twenty years ago. What could have possibly happened 20 years ago where now Connecticut finds itself $700 million in the red?

You could scour the New York Times article and you'd never find it. The reason being is that liberal rags like The Times can't bring themselves to connect the dots even when the evidence is staring them in the face.

The point The Times went out of their way not to mention is that 20 years ago Connecticut passed a state income tax. They set a rate of 4 percent and this tax gave them the false notion that they would be flush with cash. That's when they decided to pay off the unions with a new contract. That's when this whole mess began.

How do I know? Because in the late '90s a delegation of legislators from Connecticut flew all the way to Tennessee to warn us about the evils of going down the path of a state income tax. They told stories that are typical of any government that thinks it's going to see more revenue. They spend it. And they spend more than actually comes in.

Connecticut has spent all sorts of money it never had on all sorts of things the government had no business spending money on, like new ballparks and convention centers. They promised the union the state would pay 10 times more into the pension fund of state workers than the workers themselves. Then, of course, when the state income tax didn't produce the money they had expected they began shortchanging the fund. Then they raised the state income tax rate from 4 percent to 6.5 percent. Of course, that didn't curb their appetite for spending so now it's time to pay the piper and there's not enough money.

Because the state income tax has run businesses out of the state, Connecticut now actually has fewer workers in the state than they did before they passed the tax. Hard to raise money from income tax when you have less people making an income.

So, why should you care about the mess Connecticut has gotten itself into? Because it's, on a larger scale, what's happening in Washington. Our federal government has historically spent money it did not have on many things it does not need. And the solution from the Democrats in Washington in our hour of need is exactly the solution offered up for two decades by the Democrats in Connecticut -- raise taxes.

We do not have a revenue problem. We have a spending problem. For some reason Democrats just don't get that.

President Obama is now trying to convince the public that the Republicans want to blow up the country just because they don't want to raise taxes. How many times do we have to do the same idiotic thing before these people understand?

Phil Valentine is a radio talk-show host. His web site is philvalentine.com.