Hanscomb wants to eliminate income tax, increase sales tax

By Scott Benjamin

Rod Hanscomb, the Libertarian Party candidate for governor, grew up in Stamford – which is arguably the most modern and affluent city in Connecticut – and has spent much of his adult life in Seattle – which is one of the nation’s most prominent innovation hubs.

Ten years ago, Stamford ranked fourth in the world in financial services. Those businesses still play a large role in the economy of the Fairfield County Gold Coast, but the bubble burst in 2008 with the financial crisis.

UBS is still in Stamford, but no longer operates the largest financial trading floor in the world.

The Stamford metro area reportedly ranks first in the nation in per capita income and college graduates. It also is populated with companies outside the financial realm, such as Henkel, Pitney Bowes and Indeed.

However, although Stamford stands out in Connecticut, it pales in comparison to the city of Amazon and Microsoft.

“The two cities have similar education levels, but Stamford is more financial oriented, since it is close to the Wall Street bubble, and Seattle has a higher level of technology,” Hanscomb said in a phone interview.

However, he said the average property tax bill in Seattle is $5,800, while in Stamford it is $17,000.

He said Washington state doesn’t have an income tax and is one of fastest growing areas in the country.

After a career in military he worked in sales in Seattle and then owned a houseboat building business there before moving back to Connecticut.

He has become active with the Libertarian Party, is on the ballot for the November 6 election, and is appealing to debate organizers to include him in the upcoming forums. Some have a 10 percent threshold for inviting a third-party candidates and Hanscomb only registered one percent in last month’s Quinnipiac University poll.

He said when he graduate from Stamford High School in 1985, Connecticut had the top economy in the nation, partly because it didn’t have an income tax.

That would come in 1991, when then-Gov. Lowell Weicker (ACP-Essex) signed that legislation.

CT News Junkie columnist Susan Bigelow has stated that it is virtually impossible to return to the mid-1980s because Connecticut, according to The New York Times, benefitted more than any state from Republican President Ronald Reagan’s defense build-up. She has stated that the metro Hartford area also experienced an unprecedented expansion of insurance headquarters.

“I don’t agree with that,” Hanscomb said of Bigelow’s reasoning, indicating that the biggest factor for the change in Connecticut’s economy was the implementation of the income tax.

He said the nation’s fastest growing cities are in Washington, Texas, Tennessee, Florida and Nevada, all of which don’t have an income tax.

However, in Connecticut in 1994 both former Gov. John Rowland (R-Middlebury) and independent candidate Tom Scott, the former state senator from Milford, campaigned on platforms to abolish the income tax.

Rowland pledged to do so within five years, but never came close to accomplishing that during his nine and a half years as governor.

Democratic gubernatorial contender Ned Lamont of Greenwich has said that Republican gubernatorial candidate Bob Stefanowski’s plan to eliminate the income tax in eight years would cause municipalities to increase their property taxes.

By the early 2000s the income tax was supplying almost 40 percent of the revenue to the state coffers, according to then-state Rep. David Scribner (R-107) of Brookfield, and today that figure has grown to 55 percent.

Hanscomb said if the income tax were eliminated he would seek to increase the state sales tax from 6.35 percent to 9.5 percent. That is will beyond the proposed increase to 7.25 percent that was recommended last winter by the Commission on Fiscal Stability and Economic Competitiveness.

He opposes instituting tolls to help pay for infrastructure improvements, which was another recommendation made by the Fiscal Stability Commission.

Hanscomb said future infrastructure improvements could be accomplished for less money through private contractors than utilizing the state Department of Transportation.

On another topic, he said the pension obligations to state employees has reached “an unsustainable point.”

The State Commission on Fiscal Stability and Economic Competitiveness reported in March that the pensions were only 29 percent funded and the teacher pensions, which the state has paid for since 1939, are 54 percent funded.

“The state doesn’t have the money” to pay for the pensions and health care benefits have been promised to its employees, Hanscomb said.

He said the state employees should be placed in 401(k) plans similar to the ones used in the private sector.

However, Larry Dorman, the public affairs coordinator for the American Federation of State County and Municipal Employees Council 4 – which represents about 15,000 state employees, has said the current agreement for the pensions was extended in 2017 to 2027.

He has said that a consultant for the state Office of Policy Management has reported that the concessions from the 2017 collective bargaining agreement will save Connecticut taxpayers $24 million over 20 years.

However, Hanscomb says the state employer bargaining units represent the “fourth branch of government” in the state, noting that their health care benefits are well beyond those awarded to workers in the private sector.

Since taking office in 2011, Gov. Dannel Malloy (D-Stamford) has trimmed the full-time stat work force by 13.1 percent.

Hanscomb said he has spoken with state employees who have cited inefficiencies in their departments, and he believes that he could reduce the full-time work force even further.

“There isn’t an Amazon.com mentality,” he said, making reference to the large online retailer.

Connecticut has fewer jobs than it had in 1989 and is the only New England state that hasn’t recovered all of the positions lost in the 2008 recession.

Hanscomb said he believes the area primed for the most job growth in the Nutmeg State is health care, which also has a number of lucrative positions.

“A high-paying job will usually create three additional jobs,” he said of the potential spillover impact.

Third-party gubernatorial candidate Oz Griebel of Hartford also has also said he expects the state to add health care positions over the next 10 years.

Regarding Amazon, which recently joined Apple as the only companies with $1 trillion in assets, Hanscomb said Connecticut should encourage more Amazon facilities in the state.

The company currently has facilities in Windsor Locks and Wallingford with a large distribution center currently under construction in North Haven.

Hanscomb said that Connecticut, generally speaking, has restrictive zoning regulations which can in some instances stifle development.

He said in some instances he might support financial incentives similar to the ones that Malloy has made in his First Five Plus plan, which has assisted major employers if they, in return, increase their work force in the coming years. Incentives have been provided to such companies as ESPN in Bristol and Bridgewater Associates in Westport.

On education, Hanscomb said he would encourage incentives for more parents to teach their children through homeschooling and charter schools, both of which are far less expensive per classroom than the conventional kindergarten-through-12^th grade classrooms.

Malloy has made more public funding available for seats in charter schools. That effort has met resistance from the Connecticut Education Association, the state teachers collective bargaining unit.