November 30, 2018

Unions reject blueprint: Proposal to shore up state budget calls for tax cuts, state employee givebacks

Photo | Contributed
Photo | Contributed
Jody Barr, executive director of Council 4 AFSCME.
PHOTO | Steve Laschever
Former CEOs Bob Patricelli (right) and Jim Smith co-chair the Commission on Fiscal Stability and Economic Growth.

Union leaders are lambasting a report recommending the state overhaul its tax policy and wring further concessions out of state employees to help the state climb its way out of a fiscal crisis.

The now-private Commission on Fiscal Stability and Economic Growth outlined its plan Wednesday, which includes a proposal to postpone for two years a scheduled wage increase of 3.5 percent and instead, provide a 2 percent increase in fiscal year 2020 for state employees.

Additionally, the commission is recommending that state employees contribute more to their retirement benefits.

The commission is also calling for lowering the corporate income tax to 7 percent from its current rate of 8.25 percent, as well as repealing the gift, estate, and entity tax.

Salvatore Luciano, executive vice president of the Connecticut AFL-CIO, said that the tax proposals would primarily provide a break to the state's most wealthy population.

"Christmas appears to have come early for the richest 1 percent in Connecticut," he said. "At least, that's what the 'Yacht Club Commission' was hoping for when they released their latest plan that will almost exclusively benefit corporate CEOs and wealthy corporations."

Luciano criticized the idea of cutting taxes for the wealthy while keeping the income tax rate flat for middle- and low-income residents.

He said the policy closely resembles the so-called "Kansas Experiment," during which corporate taxes were cut in an effort to spur jobs and the economy.

The experiment, which also included cutting the income tax, resulted in years of deficits of hundreds of millions of dollars.

"We have seen this playbook before and do not need to make the same mistakes," Luciano said. "Connecticut can do better."

Jody Barr, executive director of Council 4 AFSCME, which represents nearly 15,000 state employees, noted that state employees have already made concessions saving the state more than $24 billion over the next two decades by agreeing to the State Employee Agent Bargaining Agent Coalition agreement last year.

"It's not collective bargaining that needs reform," she said. "It's our antiquated tax structure that benefits the ultra-wealthy and big corporations at the expense of working people."

Jan Hochadel, president of AFT Connecticut, said the wealthy members of the commission are proposing tickle-down economics policies.

"How else to explain a report pushing the kind of Trumpian austerity approach that lawmakers in Kansas and many other struggling states now openly admit doesn't work?" she said, adding that commission members are squandering an opportunity for bipartisan collaboration by pitting state employees against other residents.

Donald Williams, executive director of the Connecticut Education Association, said the commission's report mirrors a similar report it released in March, and is skewed against the less wealthy.

The report, he said, "puts coal in the stockings of the state's middle class and gives diamonds and fur to the state's wealthiest residents."

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