With gas prices soaring, stocks plummeting, inflation at a 40-year high and a looming recession, Connecticut lawmakers are forcing the state to take a closer look at inequality.
Whoever wins this fall’s gubernatorial election cannot, by the lawpropose a new budget without showing how it addresses racial and socio-economic inequalities.
The budget bill passed this spring “requires that the governor’s budget document include an explanation of how its provisions enhance the governor’s efforts to achieve fairness in the state.”
After waiting seven years to assess tax fairness in Connecticut, lawmakers are also insisting they explore it again by the end of next year — with a new focus on benefits for the wealthiest.
And while a commissioned study on housing segregation missed its first deadline, a legislative leader expects more data on the topic to await lawmakers during the 2023 regular session in January.
“I think there are a lot of people who are committed to the issue of fairness,” said House Majority Leader Jason Rojas. “To achieve that, we have to be really intentional, but we also have to be really honest with ourselves.”
In Connecticut — one of America’s wealthiest states but also home to some of its poorest cities — it’s sometimes been too easy for the government to look the other way, said Rojas, a Democrat from East Hartford.
But after two years of the coronavirus pandemic and with economists now fearing a national recession is looming, policymakers cannot afford any lapse in focus, he added.
Lawmakers challenge governor to use budget to ensure fairness
The focus begins, Rojas said, with the state budget. In the new fiscal year that begins in July, it’s a $24.2 billion plan that outlines how Connecticut will fund education, health care, public safety, economic development, and many other core programs.
The budget debate traditionally begins in early February when the governor proposes a spending and revenue plan.
Go forward, the legislator has mandatedthis proposal must “identify and remedy past and present patterns of discrimination”.
It must also ensure that these patterns, whether intentional or not, are not reinforced or perpetuated.
“Ensuring fairness is a key consideration when making recommendations to the legislature on how to allocate resources,” said Governor Ned Lamont’s budget spokesman Chris Collibee. “This provision will hold future administrations accountable to this important set of considerations.”
It sounds good in concept, said Puya Gerami, campaign director for Recovery for All CT, a coalition of labor, faith-based and other community organizations. But proponents of reform are determined that this will not be another analysis of the state left to dust on a shelf.
” We are going to use [it] as a tool to go on the offensive and push our legislators to enact the transformative policies we know they should have enacted yesterday,” Gerami said. “We are still living through this crisis of massive, unmet needs.”
That’s easier said than done, however.
Near-term state finances are very strong, even though Connecticut has more than $90 billion in long-term unfunded obligations covering bond debt and unfunded retirement benefit programs.
The state is expected to enter the new fiscal year with $3.3 billion in its rainy day fund and slightly rosy revenue projections for the next two fiscal years.
But government revenues, historically, are volatile and tend to plunge rapidly during a recession.
Adding funds to expand access to health care and educational opportunities may become more difficult during a downturn.
While Lamont and the Legislature have approved more than $660 million in tax relief this year, more than half are one-time. Gerami and other progressives are also seeking more continued aid for the poor and middle class. In a recession, it might be difficult to afford this relief without increasing tax burdens elsewhere.
Many moderate Democrats, including Lamont, and most Republicans, including GOP gubernatorial candidate Bob Stefanowski, oppose raising income taxes for wealthy households.
Pay closer attention to tax fairness
Rep. Sean Scanlon, D-Guilford, wanted Connecticut to start shifting taxes this year with a $600 per child income tax credit for low- and middle-income families.
Lamont and lawmakers instead agreed to a one-time $250 per child discount this summer — a move Republicans have called a political stunt in an election year. The governor said he would like the credit to continue in 2023, but wants to reassess the state’s finances first then.
But so far nearly 136,500 households have applied for the tax refund on behalf of 216,109 children.
“The fact that 40% of eligible families signed up within the first 28 days of its availability speaks to the need that exists,” said Scanlon, a candidate for state comptroller.
To keep tax fairness in the minds of lawmakers, Scanlon launched another new provision in the state budget that mandates a new analysis of tax burdens in Connecticut by December 2023.
That’s significant, given that when lawmakers received their last in February, it had been more than seven years since the state considered the matter.
He found that people who earned less than $44,758 in 2019 actually lost almost 26% of their income to state and municipal taxes, nearly four times the rate paid by the wealthiest families in the world. Connecticut. Those earning between $44,758 and $74,688 paid nearly three times as much as those at the top.
The next report must also specifically analyze how much the top 5% and 1% of all households actually pay.
“I think there’s a growing understanding both at the state level and at the national level that our tax code is fundamentally flawed,” Scanlon said.
Will more information lead to real reforms?
But the leader of the legislature’s Black and Puerto Rican Caucus was skeptical that more reporting and analysis would lead to real reforms.
“I don’t need many more studies to show me how the rich got richer and the poor got poorer,” said Rep. Gerardo Reyes, D-Waterbury.
Until suburban and rural lawmakers are willing to risk voting on issues that may prove unpopular in their home districts, he said, “the great divide will only grow.” aggravate”.
Those surprised at his skepticism, he added, need only watch the occasional debates about affordable housing, either on Capitol Hill or in communities across the state.
Any suggestion that the state should do more to force affluent suburbs to allow more affordable housing developments is “aggressively and fiercely opposed,” Reyes said. “The appetite [at the Capitol] because this kind of conversation is not real. The narrative of this conversation is essentially lip service.
Emily Byrne, executive director of Connecticut Voices for Children, agrees that reforms won’t happen without politically risky decisions.
But Byrne also said one way to build momentum for change is to discuss racial and social inequality openly and more often.
Given the number of households across the state — not just in cities — impacted by the pandemic, inflation, and wealth inequality issues, politicians who fail to act do so at their peril. she said.
“I certainly think kitchen tables across the state are talking more about taxes and tax fairness than ever before,” she said. “For elected officials these days, to be insensitive to the growing movement of people who are rightly concerned about inequality and inequity in this state — that would be undesirable.”
Rojas added that while affordable housing remains one of the most sensitive issues in state policy, he remains hopeful that the legislature, armed with more information, can continue to make changes.
In 2021, lawmakers ordered the Lamont administration to investigate whether state policy played a role in perpetuating racial segregation in affordable housing.
A final study, scheduled for last January, has still not been completed, but Rojas said legislative leaders realized it was “a very aggressive timeline” and chose not to press the issue.
But he quickly added that he and other leaders had not forgotten and were hoping for a report in 2023.
Whether it’s housing, health care, economic opportunity or any other fundamental issue, racial and social inequality “should be on all of our minds,” he added. “I guess everyone cares.”