The Quinnipiac University Poll released this week showed that by a 2-1 ratio respondents wanted government to cut spending to close the record budget gap before raising taxes.
This sentiment reflects a common sense approach that Connecticut households bring to their own family budgets. Reining in government spending must be the first step toward Connecticut’s fiscal solvency.
But another telling element largely overlooked within the 71-question poll was this: Unemployment and jobs ranked as the single biggest concern of the more than 1,400 randomly selected respondents. Connecticut residents remain nervous about rising unemployment, and they clearly recognize that the best antidote to this global, national and local recession is a job.
What can government do to create a way out of this economic malaise? The federal government has so far made the flimsy claim its “stimulus plan” is working, but national job losses continue to be staggering. Connecticut’s government can do no such thing because we have a constitutional requirement to balance our budget and we can’t print money.
It is the private sector, not state government, that will hasten our economy to higher ground through job creation, and we cannot afford to engage in class warfare in shaping our economic policy along the way. You cannot love the employee and hate the employer.
Connecticut is one of six states still without a budget. Unless we come up with some ways to get companies hiring again, recovery will remain elusive.
For more than 200 years Connecticut has been the Provision State; providing goods and services in war time and peace to the rest of the country and world, from buttons and bullets to whiffle balls and widgets.
But our record in helping business grow jobs and attracting business more recently remains dismal. According to Expansion Management Magazine, Connecticut ranks dead last on its “Least Business Friendly,” scale.
Putting thousands of jobs at risk by raising taxes on employers in order to sustain government and increased spending will create massive future deficits and ensure more tax hikes in the very near future — try 2011 when we will very likely could be engaged again in this very same debate.
Take the example of ABB Inc. The world’s largest producer of electricity networks announced in April it is moving its North American headquarters and 100 high level jobs from Norwalk to Cary, North Carolina, because of the “significant” cost savings to be achieved. The heavy burden of income and corporate taxes as well as energy costs proved too much for this major employer.
In the end, ABB officials indicated it really wasn’t a hard choice to make, according to published reports. The other states under consideration to headquarter ABB’s North American operations were Florida, Texas and Ohio.
The ABB example is not an isolated incident. In the two years following the last state income tax hike, Connecticut saw a net loss of more than 7,300 taxpayers to other states. With them they took more than $404 million in adjusted growth income that is no longer subject to our state’s 5 percent rate.
Eventually the legislature will come up with a budget. It should be one that enhances job creation and does not punish success.