Southbury, Conn. — The story made the front page of the New York Times: BUDGET IS PASSED FOR CONNECTICUT WITH INCOME TAX, August 23, 1991. In the state Senate, the income tax passed only after the state’s lieutenant governor broke an 18-to-18 tie. It failed its first vote in the House and, by just two votes, passed the second time through. Governor Lowell Weicker Jr. signed the bill that afternoon and triumphantly declared that with the tax-fueled budget, Connecticut would “[close] the book on the past and. . . [face] toward the future.”
Today, Connecticut is 46th in economic growth, 46th in road quality, 47th in state-pension funding, 47th in population growth, 50th in personal income growth since 2007, and since 1992 50th in employment growth. In 2016, GE moved its headquarters out of Connecticut after a tax increase, and Aetna and Alexion followed suit earlier this year. The state government has increased taxes twelve times in 27 years, and in 2020, the state government’s spending will outpace its revenue by 13 percent, a deficit of $2.6 billion. It’s the only state with both a death and gift tax, and it won the Tax Foundation’s award for highest tax burden last year.
A jarring report by the Hartford Courant found that Connecticut’s home prices still haven’t recovered from the housing crisis. Real-estate agent Joanne Breen leaves Courant readers with a message that echoes across the state, from crumbling foundations in northern Connecticut homes to the empty Aetna building in Hartford: “I’ve never seen us to be so far behind the rest of the country.”
Republican gubernatorial candidate Bob Stefanowski agrees, and he seems to be the only candidate who does. Stefanowski is running against Democrat Ned Lamont and Independent Oz Griebel to replace outgoing Democrat Dannell Malloy, who is not running again after serving two terms, and the race between the two serious candidates is, as of earlier this week, tied.
Stefanowski is a self-described “rebuilder” from New Haven who rebuilt parts of GE and UBS during his time as a division CEO and London-bureau CFO, respectively. In a small classroom after a GOP Unity event in Southbury, Conn., Stefanowski explained to me that his perspective as someone who was born in the state, educated by the state’s public schools, and employed by a business headquartered in the state (excuse me, formerly headquartered in the state), is what impelled him to run. Like many residents of Connecticut, he’s “tired of what [he’s] been seeing going on.”
His platform can be summarized as “fiscal-discipline first.” To stem the outflow of people and businesses, he plans to eliminate the gift and estate tax and decrease or eliminate the corporate-income tax. To stem the unfunded spending, he will enable zero-based budgeting and adjust spending to match revenue. The largest change, and the most controversial, is his proposal to eliminate the state income tax, which raises about $9.7 billion in state revenue and accounts for half of the state’s general fund. Stefanowski’s plan has been criticized thanks to a bad-faith redefinition of the word “eliminate” as “remove instantly.” Leaping on the opportunity, Lamont has taken to guessing wildly at what awful things Stefanowski will cut. The reality is far different.
First, Stefanowski won’t consider tax cuts for two years, a window during which he will fund a budget shortfall. Second, the tax will be eliminated over eight years. It won’t all happen all at once on Stefanowski’s two-year anniversary in office. Finally, and most important, the cut is conditionally dependent on revenue triggers, meaning that if state revenues can’t absorb the next cut, the cut doesn’t go into effect. It won’t happen if the state can’t afford it.
Running alongside Stefanowski is Joe Markley, a five-term state senator who served his first term in 1984 and began his second in 2010. Markley brings to the ticket legislative experience, which Bob doesn’t have, and, as he puts it, a knowledge of “who to trust and who to work with.” Markley’s most important role might be his elevated responsibility in the state senate: Control of the chamber is currently split 18-to-18, and during the last term, Malloy’s second-in-command broke a tie vote 40 times. Given that just six of the seats up for election are competitive – two held by Democrats and four held by Republicans – it’s not unlikely that the next lieutenant governor could hold the same power.
When considering the present attitude toward Democratic fiscal policies in the state, it’s hard to believe that Lamont is tied with Stefanowski. Malloy’s decision to leave office was undoubtedly inspired by his approval rating of 21 percent, which is second-worst among the nation’s governors. His approval rating is low for a simple reason: His incessant, steady tax increases coupled with out-of-control spending not only failed to fix the state’s woes but exacerbated them, driving businesses and people to more favorable climates. By shaming Malloy out of office and then telling pollsters that tax increases and the state budget are the top two most important issues, Connecticut’s people have made it clear that Malloy’s policies – undeniably Democratic – are to blame.
Nevertheless, Lamont persists. His only selling point is that he lost to Malloy twice in the 2010 gubernatorial election, and despite the fact that he would be the same governor, Lamont has convinced voters his loss to Malloy means otherwise, according to pollster John McLaughlin’s estimation. One example is how Lamont brands his so-called “property-tax cut:” On his website, Lamont boasts that he will “reverse Malloy’s tax hike by raising the property tax credit. . . by 50%.” Sounds good, right? The increase is $100. It’s not even a drop in the pond.
On the tax issue as a whole, Lamont has been confusing and inconsistent. The “property-tax cut” language seems benevolent and commonsense, but it doesn’t box him in if he decides he wants to raise taxes after he’s elected. Especially because he’s already decided that he will. On May 24, during an appearance on the Chaz and AJ radio show, he timidly answers “yes” in response to the question, “Will you increase taxes.” Footage from a campaign event earlier this year shows Lamont saying that he plans to expand the property tax further by imposing a new statewide tax on cars.
He appears aware of the financial issues facing Connecticut, talking in his position paper and during debates about deficits, debts, political malpractice, and misaligned priorities, but his other plans don’t reflect it. He is proposing hiking the minimum wage to $15 an hour and imposing carbon restrictions, giving businesses yet another reason to move out. His most irksome fetish is supporting tolls on Connecticut highways, which the Courant said could cost commuters up to $800 per year and would almost exclusively target in-state residents, considering that 70 percent of those tolled are in-state residents. (As Stefanowski points out, “tolls are taxes.”)
The only reason Stefanowski isn’t polling leagues above Lamont is because of Connecticut’s sharp bend to the left. While state politics lean purple (of the last three governors, two were Republicans), in 2016 the state voted for Clinton by 15 points. If he can overcome this Democratic advantage, he must also overcome independent Oz Griebel, who is running to the middle of both candidates, though he also wants to raise taxes and impose tolls. Griebel’s party endorsed Stefanowski, but Griebel could play spoiler by attracting voters who won’t vote Republican but don’t want Lamont.
These struggles of political identity that are threatening Stefanowski might play a larger impact if he were running in a different state, but Connecticut isn’t facing hypothetical problems. Its residents can see reasons to vote for him in their home values, their pension funds, their paychecks, and their roads. The state is being sucked dry, and voters across the aisle are concerned about how close to the event horizon they are now – and how close Democrats would push them. For now, it’s the state you pray your state doesn’t become. Is it headed for something much worse?