As the entire nation confronts the problem of unfunded mandates and bloated government spending, individual states are doing the same.
Republican governors Chris Christie (New Jersey) and Scott Walker (Wisconsin) are letting government unions know that they can no longer expect to receive the kind of benefits and pensions they were falsely promised by union leaders and past state politicians whose campaigns were funded by union coffers. These governors are handling the displaced anger of union members who are only beginning to experience a little of what private sector workers have known for years. They know that increasing taxes will only cause businesses to leave their states and wreak further hardship on taxpayers already reeling from a struggling economy. Governors Christie and Walker are letting union members know that they are not entitled to exceptional treatment when the state is “broke.”
Democratic governor Andrew Cuomo (New York) wants to cut his state’s budget for the first time in 17 years. He proposes to fire nearly 10,000 state workers unless they agree to $450 million of savings, and plans to close a $10 billion deficit without raising taxes or borrowing. His proposed cuts include Medicaid spending and aid to schools. Cuomo’s message is clear: the state of New York can no longer spend beyond its means.
On Wednesday, Connecticut’s new governor, Democrat Dannel Malloy, presented his first budget, one that includes a $1.5 billion tax hike in the first year and only slightly less in the second year of the two-year cycle. The tax increase is one of the largest in the state’s history, and one that will hit, primarily, middle class families. The governor hopes to raise income taxes, the state sales tax, and taxes on cigarettes, gasoline, alcohol, and estates. Malloy’s budget would eliminate a $500 property tax credit, a “tax-free” shopping week prior to school’s opening, and a sales tax exemption for clothing, haircuts, pet grooming, non-prescription drugs, car washes, and many other items and services. The governor and his advisers are referring to this tax hike as “shared sacrifice” in a state that is already one of the highest taxed in the nation.
With the highest per capita debt in the nation, Connecticut shares only with the state of Michigan the distinction of having no job growth over the past 20 years. The projected budget deficit next year is approximately $3.5 billion. Yet, Malloy’s budget would provide a $1700 earned income tax credit for those making less than $21,500 per year (those who pay little, if any, taxes), and would allow both an increase in overall spending by 2.4% and $1 billion in borrowing in each of the next two years. The governor calls this budget “putting Connecticut’s house in order.”
The governor says he wants to cut $750 million from various state programs next year, and will ask the state’s employees to give up $2 billion in salary and union concessions over a two-year period. What is missing, however, are the details of the concessions unions will make as well as some of his proposed budget reductions. When a governor is so detailed about tax increases but provides little information about spending cuts and union concessions, one can only suspect that he will be relying on tax payers to meet his ends.
In fact, John Olsen, president of the Connecticut AFL-CIO, said that the governor’s $1.5 billion tax hike had to go higher. State employees spokesman, Larry Dorman, also responded to Malloy’s suggestion of union concessions, saying that Connecticut has a revenue problem, not a spending one.
The unions were big supporters of Malloy’s campaign. When he secured the endorsement of CSEA/SEIU Local 2001, union president Catherine Osten said Malloy would be a “once in a lifetime” governor for them. Clearly, this incestuous relationship suggests Malloy will not be as tough on the unions as he is on taxpayers. It also suggests the likelihood of even more businesses, and families, leaving the state.
While most states, regardless of the party of the leadership, are realizing that the notion of endless government spending, courtesy of taxpayers, is nothing more than a fantasy, Connecticut seems poised to join the ranks of California and Illinois- the few states that are still in the grips of power-hungry union leaders, who continue to dangle now imaginary carrots in front of sheep-like followers. The leaders of these states are using the usual liberal guilt trip of “shared sacrifice” to extricate more funds from citizens who are already sharply cutting expenses from their household budgets. It’s time for these states to stop their finger-wagging at taxpayers and learn from those leaders who are demonstrating that they are prepared for the hard work of governing.