Saturday, August 14, 2010

The Foley and Malloy Prospectus Compared Part 2 – Taxes and the Budget

This is the second in a series of blog posting regarding the plans of the Republican and Democratic candidates for governor, Tom Foley and Dan Malloy. All of the information provided in the posting is from the candidate’s web sites, and clicking on the “Issues” and “Tom’s Plan” selections. The opinions are my own and not cleared with either candidate’s staff. In the interest of full disclosure, I am a supporter of Dan Malloy and worked as a volunteer on his 2006 campaign as well as the current 2010 campaign.

I will begin with some general observations about the plans that the candidates have posted on their web sites. If less is more, then Foley wins hands down. His plan turns out to be seven pages in my word document. The Malloy plan is a whopping forty eight pages with great detail. I guess that is fitting since most Republicans believe less government is better, obviously a short plan will lead to less government. From the Democratic perspective, government is good and Malloy shows just how he plans to shape and change much of the state government in great detail.

Of course, there is no guarantee that either of the candidate’s will do what they lay out on their web site when actually in office, but like a stock prospectus, it is an indication of the plan and direction each candidate will pursue once in office.

I am leaving out much of the explanatory text in the plans and just noting the planned action items. Both plans are written in the first person, so I will keep that same format as I quote or paraphrase from each plan. The reader will have to remember that the occasional “I” is either “Governor” Foley or “Governor” Malloy.

This comparison continues with the prospective governors’ take on taxes and budgeting. Since I started with “Governor” Foley in the last post, I will start with “Governor” Malloy in this post. I will continue this alternate presenting throughout this series of postings.

“Governor” Dan Malloy
We have to be committed to getting our fiscal house in order, budgeting within our means, and being better prepared for downturns in the economy. I will focus our attention on the problem and our resources on the right solutions. I recognize that sensible state budgeting is connected to fairer local budgeting. As governor-after-governor has proven, we simply cannot fix the system without addressing this relationship.
Reform can only be completed with the commitment of a Governor to end our over-reliance on local property taxation. Change starts with fixing education funding and finally meeting our State's constitutional obligation to provide a fair share to Connecticut's communities. Sensible state budgeting is connected to sensible local budgeting.

As Governor, I will initiate long overdue comprehensive tax reform for our State. Reform will be guided by 5 key goals. Real tax reform must:
Be sustainable, comprehensive and address the balance of state and local taxation
Provide for a fairer and more progressive sharing of taxation
Ensure a greater and more equitable state share of local funding for schools
Strategically generate job growth and encourage business development
Relieve the local property tax burden on low and middle income seniors, veterans, and individuals who are disabled
To that end, my administration will review and consider the following strategies:
Joining with a number of other states that allow municipalities to tax different types of property at different rates, particularly low and moderate income housing, housing for the elderly, and housing for individuals with disabilities, as done in Minnesota.
Allowing buildings to be taxed at a different rate than land, as is done in Pennsylvania, to encourage smart growth, reduce blight, and encourage property improvements.
Permitting cities and towns to further diversify their revenue sources by levying limited sales and use taxes, as is done in Nevada, to pay for open space and parks.
Instituting revenue sharing and permitting a portion of taxes generated in a municipality to be retained.
Encouraging flexible changes that could allow cities and towns to share in the revenue generated from utility, cable, sales, and hotel taxes.
Expanding personal income tax credits, providing homestead exemptions, or instituting property tax rebates as is done in Kansas, Minnesota, New York, South Carolina and Wisconsin.
We also cannot truly fix our system of taxation without spending more wisely. We also must reduce our reliance on debt and prioritize projects based on their ability to stimulate job growth.
One of the most fundamental budget reforms we should consider enacting is requiring state government to abide by generally accepted accounting principles (GAAP) - as local municipalities currently do - to gain a more complete and accurate picture of our budget.
Overall, and perhaps most important, we must restore the fundamental goals of state government: to protect the state's most vulnerable citizens, enhance economic security, provide educational opportunity, maximize public safety, and to promote equity, fairness, and justice.

“Governor” Tom Foley
As Governor, I will veto any attempt by the legislature to raise taxes. I will order a review of state tax policy to ensure the way we tax our citizens and our businesses is fair and equitable, doesn’t put us at a disadvantage versus other states, and supports strong economic growth and job creation.
I will aggressively reduce spending so that we can reduce taxes and still comply with our constitutional requirement to balance the state budget
I will compare our tax rates and tax policy to other states, particularly neighboring states, to be sure our taxes are not driving businesses and working families away from Connecticut
I will aggressively reduce spending so that we can reduce taxes and still comply with our constitutional requirement to balance the state budget
I will increase transparency so that Connecticut taxpayers aren’t being hit with “stealth taxes” they can not see, such as the gross receipts tax on gas stations
I will work with the legislature to agree on a bi-partisan, long term tax policy for Connecticut that is based on sound economic policy and fairness, and which puts an end to the old-world politics of pitting groups of citizens or regions of the state against each other
As Governor, I will act immediately to increase transparency and eliminate deceptive practices. I will have Connecticut adopt Generally Accepting Accounting Principals (‘GAAP’) to reduce financial game playing by the legislature. I will fight to repeal mandates on businesses and towns that raise their costs.
As Governor, I will use my 25 years of executive experience and negotiating skills to bargain hard with the legislature to pass a budget that reduces state spending. I will move to stop Hartford from borrowing to pay for ordinary operating expenses, an irresponsible practice that the legislature is currently using to avoid cutting spending.
I will seek a stronger line item veto and then use it to protect spending reductions and block attempts by the legislature to raise taxes
I will not be afraid to make tough decisions to protect the future of our state
I will work hard to generate a more bi-partisan, cooperative culture in Hartford focused on solving problems rather than partisan bickering and infighting
I will immediately move to eliminate loopholes that allow funds intended for dedicated purposes such as investing in our transportation infrastructure and supporting our schools to be used instead by the legislature for general fund pet projects
I will eliminate other ‘tricks of the trade’ Hartford uses to avoid compliance with our prudent state spending cap and constitutional requirement to balance the budget
I will put an end to the Bonding Commission borrowing to pay for ordinary operating expenses, an irresponsible practice that the legislature is currently using to avoid cutting spending
I will insist that the state upgrade its internet portal to make it easier to use, provide citizens the opportunity to transact more business with the state on-line, and provide more transparent information about what your state government is doing with your money
. I will end the practice of Hartford imposing unfunded mandates on towns and otherwise restricting towns’ ability to conduct their business
I will review and seek repeal of mandates on towns that unnecessarily raise their costs
I will work to assure that Connecticut’s towns have more of a voice in determining state policy and decision-making by holding quarterly forums including town leaders, legislative leaders, and the Governor
I will work with the legislature to produce timely budgets so that towns can better plan their own budgeting
I will work to assist towns who want to participate in regional cost sharing by, for example, allowing joint permitting and otherwise simplifying the process and reducing the cost of complying with state laws

Except for the promise to veto any tax increase by “Governor” Foley, the two plans are very similar. Both “governors” favor the state using GAAP just as cities and towns are currently required to do. Both will bench mark against other states to find best practices. “Governor” Foley also is more specific in what actions he would take to reduce state expenses. Again, it is up to the reader to decide which plan has the most chance for success.

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