Silly Season Starts

by Steve Kalb | December 29, 2008 10:46 AM | | Comments (8)

img_0419.jpgNot long after the ball drops in Times Square, legislators will convene in Hartford to begin discussing what they plan to do about Connecticut’s budget deficit, pegged for the next two years at a round $6 billion.

It is not a dissimilar situation from the one Connecticut was in back in the early ’90s. In those days it was a $750 million deficit on a $7 billion budget.

For many legislators this will be the first time they will be faced with declining revenue and will have to make tough budget decisions. It is easy to be a legislator when the biggest problem you have with the budget is trying to figure out how to spend all of the money. Just ask the governor from Alaska.

You’ll hear the traditional calls from some Republicans to dramatically scale back the size of government. There’ll be calls for early buy-outs, cuts to cities and towns and (this time around) bringing back tolls.

Bring back tolls? We’d have to give back boatloads of money to the feds for roadwork already done. Then we would have to build and staff these concrete behemoths. The math says in the end we would wind up on the short end by hundreds of millions and the bonus for this trip down memory lane would be we’d have tolls. The devil’s always in the details.

Democrats will look for “revenue enhancements,” the polite way of saying more taxes, including raising the income tax on the so-called wealthy and trying to get more money from corporations. They may also call for raising the sales tax and trying to get more revenue from the Indian tribes. Bet on at least one.

But before we take a hacksaw to the state budget or bring back the slew of nuisance taxes including the “ever popular” taxes on newspapers and soda why not look at where the state should be getting tax revenue, but isn’t.

As you might guess, I have a short list:.

1. Collect sales tax on internet sales. Opponents will scream and holler, but there must be a way to collect sales tax on those who buy “stuff’ and have it delivered here. Put in a $100 threshold to shut up the “internet should be free to grow and prosper” crowd. Right now you’re supposed to keep track of the internet purchases you make during the course of a year and then pay what is called a “use tax” (equal to the sales tax) at the end of the year if the place you bought from didn’t collect sales tax. “Betcha” that happens a lot.

2. Help municipalities collect revenue owed to them by cracking down on property tax scofflaws. City and towns lose millions every year to people who register their boats and cars **anywhere but here**and pay no property taxes. If you claim you live out of Connecticut six months out of the year then we should give you a six-month registration. If you re-register your land or water ark here without a six-month break, you would be required to pay all of your property taxes for the year.

3. Each year Connecticut sends millions to cities and towns for some of the property taxes not paid by for not-for-profit colleges, hospitals, houses of worship, etc. I think it would be fair to suggest that lawyers for these entities have figured out ways to maximize the amount of property listed on the tax rolls as “exempt,” thereby paying less taxes. The state should simplify and clarify the definition of “exempt property.” For my part I have always wondered how a “gym” owned by a private college could be called an educational facility and therefore be tax-exempt property. Come on fellas, it’s a gym.

And expect a lot of finger-pointing and trying to blame the “other guy” for our current problems. Like I said, it is easy being a legislator when all you have to do is figure out how to spend all the money. Now it gets tough.







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Comments

Posted by: GeekGirl | December 30, 2008 10:45 AM

The problem with sales taxes and the internet is that there are 1000s of different sales taxes out there.

Say you're a CT company and you sell something to a California resident. What's the sales tax? It varies from locality to locality. Which is why the Supreme Court essentially said that was an onerous burden for companies with no presence in the state, i.e. nexus.

Now, there is an attempt to work on this issue, see: http://www.streamlinedsalestax.org/

Posted by: JP | December 30, 2008 11:45 AM

We already have that its called the use tax its just no one bothers to pay it.

Posted by: City Hall Watch | December 30, 2008 12:25 PM

Any new taxes at a time of extreme stress on families and a larger extreme downturn in the general economy is just stupid. Connecticut legislators should look first to the multi-billion increases in spending they've approved in the last five years. Cut all that out and you would balance the budget. In one of the last three surplus years, there was a $1.1 billion surplus and the braintrust in Hartford spent $900 million of it for programatic enhancements and expansions. That was not a one time revenue boost. The same is true in the municipalities - they spent us into the toilet. It is not a republican idea to trim back the size, scope and expansiveness of both the state and city budgets, it's a taxpayer's idea; it's a homeowner's idea. We can't take it anymore.

Posted by: Ellis Copleland | December 30, 2008 12:26 PM

First and foremost the state could save a boatload of money by putting a moratorium on doing business with the mob. Everybody knows Corrupticut is the most mobbed up state in the union. And it's not like we don't know who they are.

Secondly, Connecticut has WAY too many idiotic taxes now, increasing them will NOT help matters. You need to ask yourself, "how do southern states get away with having such low taxes?" They provide the same level of service. We need to be getting rid of taxes on vehicles period. We need to be lowering property taxes. We need to get rid of the minimum business tax. all this would begin to free people up to start ventures and begin making money, which would be taxed by the INCOME tax. Speaking of which, legalizing drugs and taxing them should be done.

Posted by: Deuce Frehley | December 31, 2008 8:07 AM

We don't pay a state sales tax when ordering products out of state over the phone or by fax, why should the internet be any different? Tax, tax, tax. That's the liberal way.

Posted by: Steve K | December 31, 2008 2:18 PM

Just to help Mr. Frehley and others, from Nolo Press:

"If an online retailer has a physical presence in a particular state, such as a store, business office, or warehouse, it must collect sales tax from customers in that state. If a business does not have a physical presence in a state, it is not required to collect sales tax for sales into that state. This rule is derived from a 1992 Supreme Court decision which held that mail-order merchants did not need to collect sales taxes for sales into states where they did not have a physical presence."

It is a Grand Canyon sized loop hole that should be closed. In my opinion, sales tax (regardless of how the sale is made) should be charged at the time of sale based on the locale to which the item is being delivered. Example: buy it in Idaho, ship it to Connecticut, then Connecticut gets the sales tax. It would prevent companies from locating in states without sales taxes and injuring states that do.

It is not only liberal (for which I am quite proud to be one) it is fair.

Posted by: maddy kazansky | January 4, 2009 8:24 PM

is this steven kalb from brooklyn looking for maddy kazansky email me how have you been i saw a comment on th internet tried emailing you said email address wrong

Posted by: steven kalb | June 1, 2009 9:56 AM

Looking for Maddy Kazansky

My email is stevenkalb@optonline.net

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