Harding Balks At Tax Talk To Resolve State Budget Deficit

By Scott Benjamin

BROOKFIELD – State Rep. Steve Harding (R-107) says he won’t support raising taxes to offset a projected $244.6 million state budget deficit or use tolls and tire fees to finance transportation infrastructure.

“I don’t look at the revenue as a possible answer,” said Harding when asked how the General Assembly should erase another projected shortfall in a raft of deficits to hit the state since the 2008 fiscal crisis.

“I think we need to search for more efficiency in government,” he said, pointing to state employee overtime freezes, attrition in hiring and a reduction in staff in the executive offices as possible solutions.

Will that add up to $244.6 million?

“I don’t know,” Harding said in an interview shortly before the February 7 start of the General Assembly’s regular session.

CT Hearst Business Columnist Dan Haar has stated that the state has become more efficient under Gov. Dannel Malloy (D-Stamford).

Since taking office seven years ago, Malloy has trimmed the state work force by 12.6 percent, got the state employee bargaining units to accept no pay increases in five of those years and reduced the prison population to its lowest point in more than 20 years.

One of the state government’s largest expenses is employee salaries and benefits.

However, the General Assembly narrowly approved a new package for the collective bargaining units last summer. The union leaders say that through concessions it will save the state $1.57 billion during the current two-year budget cycle and $24 billion over the next 20 years. It came with a four-year prohibition on layoffs.

Harding said state officials should always consider talking with the collective bargaining units about further concessions, but acknowledged that it is unlikely they would happen in the near future.

The state representative, who last month announced that he will seek a third term this November, said over the recent years the revenue figures from the Office of Fiscal Analysis, the General Assembly’s budget arm, have been too optimistic and the legislators will now need put together more conservative revenue projections as they develop future budgets.

Harding said the state continues to live beyond its means. He said since 1990, the year before the income tax was enacted, there has been an 87 percent increase in spending in Connecticut, a 50 percent boost in gross domestic product and a mere 9 percent growth in population.

If the General Assembly, which approved a bipartisan budget last October – nearly four months after the start of the current fiscal year, can’t trim $244.6 million in projected deficits, then what is the next step?

‘I don’t think there is a next step,” Harding said, who insists he won’t support any tax increases, such as Malloy’s proposal to boost the sales tax from 6.35 percent to 6.9 percent.

Should the General Assembly join the governor’s effort to further reduce municipal aid?

“A reduction in municipal aid is just a tax on the people in the municipalities through placing a burden the local budget,” said Harding. ”The state and the municipalities have had a strong partnership for more than a century. I don’t think that we should change that.”

With perennial budget deficits is it time to restructure the state-municipal relationship so the towns and cities take a greater share of the burden? For example the 1996 and 2008 New England Association of Schools and Colleges accreditation reports on Brookfield High School stated that there is a disconnection between ability to pay and willingness to pay higher taxes in the town.

“I speak with constituents who say they have a difficult time paying their property taxes,” said Harding, 30, who represents all of the Brookfield, the Stony Hill section of Bethel and a slice of northern Danbury.

He said he also will oppose efforts, which are being led by Democrats, to establish sports gambling in Connecticut.

“We already have enough gambling and having sports wagering would prompt some of our people to gamble when they didn’t have the sufficient money to do that,” said Harding. “We have a budget deficit, but the decision should be based on policy and not economics.”

The Democrats also are campaigning to get a major transportation construction plan approved before the regular session ends in early May.

Connecticut residents have bemoaned the state’s crumbling infrastructure for years – noting the congestion on Interstate-95 near Stamford and the traffic jams on Interstate-84 near Waterbury.

Malloy, who is not seeking a third term this year, has called for a 30-year, $100 billion package that was partly developed three years ago by an ad-hoc committee, and now he and legislative Democratic leaders want to increase the gasoline tax by four cents a gallon until electronic tolls plazas could be installed and also add tire fees to pay for the program.install electronic toll plazas, impose a tire tax

Harding, an attorney, said he opposes installing tolls or tire fees, since they represent another tax.

Additionally, he has reservations about the constitutional transportation fund lockbox that will be on the November election ballot. He says the proposal “doesn’t have enough teeth to it. It doesn’t say what is mandated to go into that fund.”

Critics have said the special transportation fund has too often been used as a deficit mitigation tool. The governor announced recently that the fund is on the verge of going into deficit.

Connecticut lacks a high-speed rail system similar to Japan’s or the bullet train that California Gov. Jerry Brown is trying to build from San Francisco to Los Angeles.

University of California at Berkley economist Enrico Moretti wrote in The New York Times last year that high speed rail can transform an economy, noting that residents living in California’s Central Valley could now have access to jobs in the high-salaried Silicon Valley.

Harding acknowledged that even if the funding became available, there would be challenges to building a high-rail system since some towns have indicated they don’t want it in their back yard.

“It has to be done very delicately,” he said. “Towns have a right to be concerned about the disturbances to neighborhoods and the environment.”

Regarding economic development, Harding said the state should focus on new technologies, which usually spur employment growth.

However, Connecticut, which is the land of steady habits has scant land available. Aside from being the 48^th largest state geographically, several municipalities want to maintain a revolutionary feel

Former state Rep. David Scribner (R-107) of Brookfield, Mr. Harding’s immediate predecessor, said in a talk in 2009 that the state was too reliant on capital gains revenue from the Fairfield County Gold Coast.

Although, for example, Brookfield and Southbury both grew in leaps and bounds in population a generation ago following the establishment of the Dwight Eisenhower Interstate Highway System, and are currently experiencing growth in retail development, there are loads of tiny towns in Litchfield County and Eastern Connecticut that are committed to their rural roots.

With the Foxwoods and Mohegan Sun casinos creating a hub in the southeastern part of the state starting in the 1990s, there were hopes of an entertainment hub. In 1996 Six Flags proposed building a theme park the size of its Great Adventure facility in New Jersey, but it didn’t come to fruition. Utopia Studios had a plan in 2006 to construct a combination movie production operation and theme park in Preston, but municipal officials objected when the company didn’t have enough money in escrow.

A generation ago, Danbury built a shopping mall where a popular fair grounds and race-arena were located. Today, it ranks first in sales tax revenue in the state and first, per capita, in restaurants. Few municipalities in Connecticut are in the position to make that choice, or even if that option were available, would select economic development.

Unlike Texas, Connecticut’s cities are more vertical than horizontal. Bridgewater, with about 1,700 people, is 17 square miles, and New Britain, Connecticut’s eighth largest city with 82,000 citizens, is just 13 square miles.

Mayors, such as Democrat Dan Drew of Middletown, a 1998 New Milford High School graduate, complain that it’s difficult to boost economic development when a considerable amount of property consists of state facilities or universities, which are not on the tax rolls.

Thus, the state might have to continue to rely heavily on economic gains in Stamford, which a decade ago ranked fourth in the world in financial services and now appears primed to be an area for financial technology growth, and Greenwich, where a decade ago one-third of the office space was occupied by hedge fund companies.

The other options for major activity would be the Jackson Labs bio-sciences center, which Malloy helped attract in 2011 to the University of Connecticut Health Center in Farmington, and fuel cell technology, which Connecticut has been a leader in largely as a result of the research done for years at UTC Power in South Windsor and Fuel Cell Energy in Danbury and Torrington.

On a local issue, Harding said he hasn’t decided how he will vote in the February 27 referendum on the proposed $14.77 million Brookfield Library, which would be built on the horse statue field at the municipal campus along Pocono Road.

“The current library is not as effective as it could be,” the state representative said. It was built in 1975, has limited meeting room space and a parking lot that can accommodate just 38 vehicles.

However, Harding said some constituents have expressed reservations about financing a two-story, 35,000-square foot library when two other capital construction campaigns are about to begin.

The News-Times has reported a ball-park figure of $8.5 million to renovate the 30-year-old police headquarters on Silvermine Road. Additionally, Harding said the proposed renovations for the 53-year-old Huckleberry Hill Elementary School on Candlewood Lake Road could be the most expensive project in Brookfield’s 230-year history. It may be late this year or early next year before cost estimates are available for the renovations or new construction.

Brookfield First Selectman Steve Dunn, a Democrat, has said that with the municipal debt service declining by half over the next decade and at least $1 million per year in additional tax revenue from the commercial development in the 198-acre Town Center of Brookfield near the Four Corners intersection of Federal Road the town can finance all three projects over time if they don’t completely overlap.

“I’m not sure yet,” Harding said regarding whether he will support the proposed library. “I still have to listen to both sides more.”