Tax big box stores, millionaire mansions, marijuana to close the budget deficit

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Democratic legislative leaders have joined Gov. Dannel Malloy and the GOP in calling for across-the-board budget cuts to deal with the budget deficit. All sides are now calling for spending cuts. Advocates are bracing for cuts to mental health services, cuts to schools, cuts to job training, cuts to hospitals, cuts to transportation, and cuts to aid for cities that will put overstretched agencies and programs at risk of catastrophe.

But we already had this debate. During the last legislative session, residents across Connecticut demanded an end to the merciless cuts suffered this Great Recession. Families with developmentally disabled children, representatives of the mental health community, parents with kids in charter schools, and others spoke clearly —face-to-face— with legislators, saying enough is enough. Thankfully, the General Assembly did the right thing and passed an historic budget that prevented many cuts and even reformed Connecticut’s regressive tax system.

Thanks to unfortunate budget forecasts and the power of big business lobbyists, however, the budget has been reopened. Unlike this summer, when the people affected could make their case, legislative leaders and the governor negotiate in private — and plan vicious cuts.

But spending cuts will not fix the problem. Nobody is proposing enough reductions in spending such that future budget forecasts will look good again. Many of the cuts, in fact, would actually increase the budget gap and make things worse:

  • Reductions in hospital funding cost the state millions in lost federal funding;
  • Eliminating public financing for elections will make it easier for corrupt campaign donors to get spending on pet projects;
  • Cuts in job training programs and mental health services, for instance, will only serve to make more people reliant on welfare programs.

To seriously close the budget gap, we need to look at more than spending cuts. As I have written elsewhere, in the long-term, we must rejuvenate our cities as centers of industry so that our economy can grow and our budget is less reliant on Fairfield County.

But in the short-term, we need to look at revenue. Here are a few ways legislators can raise revenue without harming the middle class or low-income taxpayers:

  • We need the “Big Box Fee” on businesses with over 500 employees that fail to pay their workers living wages. The fee would raise needed revenues and reduce public spending because many businesses, like Wal-Mart and Dunkin’ Donuts, expect their workers to receive government benefits to survive.
  • We need to legalize and tax marijuana. Connecticut has already decriminalized recreational marijuana and allows medicinal use. In a fiscal crisis, we should not be tolerating marijuana use without collecting revenues that could be used to support criminal justice and youth programs.
  • We should consider a statewide property tax on mansions with valuations over $1 million. In the debate over the income tax, many worry the rich will move out of our state if asked to contribute a little more. The rich cannot, however, move their mansions. If millionaires try to move to avoid this tax, they would need to sell their mansion to someone else who would have to pay.
  • Raising the minimum wage would increase take-home pay for low-income workers and thus increase income and sales tax revenue. Raising the minimum wage would have no cost in this year’s budget.

Our legislators know, from last legislative session, that our state’s most vulnerable populations cannot endure another round of cuts to important programs like mental health treatment or assistance for the developmentally disabled.  Luckily, they have other options.

Legalizing marijuana, or taxing big box stores, or taking on millionaires like Jeffrey Immelt who have teams of paid lobbyists, will not be easy. But sometimes the right answer is also the hard one. Legislators should make the hard, smart choice and raise revenue to fix the budget.

What do you think?

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