TO: Jeff Kurz, Record Journal, Editorial Manager
FROM: Lou Arata
DATE: January 21, 2020

RE: TERM LIMITS, NOT TOLLS

We need term limits, not tolls. We need to elect true leaders who have the gumption to implement ideas to stop the incessant taxation which is a plague in Meriden and the state of Connecticut. We elect followers, hell-bent on keeping power and control at the cost of losing taxpaying citizens and corporations alike.

We see successful outcomes in other communities surrounding Meriden where voters exercise basic common sense and elect politicians from both parties and policy is made by differing majorities or on a bipartisan basis. In Meriden, like the state of Connecticut, we have for decades continued to elect Democrat majorities and kept decision making in the hands of that one group. This is fertile soil for abuse.

The proof in Meriden is seen in our spending habits. Our Democrat majority, being left unchecked for decades, has fallen in love with borrowing and spending resulting in excessive taxation, one of the highest mill rates in Connecticut putting constraints on our family budgets. We continue to spend above our bonding cap. Few seem to care or express outrage! As surrounding towns are prospering, (many led by Republican majorities) Meriden leaders use cheerleading tactics to make us “feel” that Meriden is on the right track.

Let’s join successful administrations surrounding us and see our City Council pass a “No Tolls” resolution. Say NO to tolls. Commuting workers, following our children to away games, anyone buying retail for that matter, will see costs go up across the board.

When is enough taxation enough? Oh right, we already lived that, in the Meriden budget referendum– where instead of decreasing taxes, the City Council actually RAISED THEM. Here we are, yet again, just through another municipal election cycle and voters are electing the same cats, with the same stripes, into the majority.

TO: Jeff Kurz, Editor- Record Journal
FROM: Lou Arata
DATE: March 8, 2018

RE: Time For New Thinking

According to Tax Foundation, Connecticut has the highest total tax burden in the nation. We already have the dubious honor of being the only state in the nation to have both a gift and an estate tax and Governor Malloy wants to add on some more.

From 2005-2015 an extraordinary $6 billion in adjusted gross income (AGI) left this state and migrated to Florida alone- while the Connecticut legislature, along with Governor Malloy’s approval while he’s been in office, raised state income taxes in 1992, 2003, 2009, 2011 and 2015.

With tax payers permanently leaving Connecticut by the thousands and our legislature and Gov. Malloy ever increasing the tax burden on those left, is it any wonder that according to Standard & Poor’s, Connecticut’s credit rating is 3rd lowest in the country? That means it’s going to get harder, much harder to borrow money to possibly assist in getting us out of this financial log jam. Our pensions are the 4th worst funded (2015) and now Malloy’s budget chief, Office of Policy and Management Secretary Ben Barnes, is trying to sell the idea that it makes sense taking the CT Lottery proceeds to bankroll the Teachers’ Pension Fund.

So, what if it were decided that taking that $335 million (+/-) per year, for the next 10 years, was okay for the teachers own pensions? What about all the other departments and services who’ve been receiving that yearly revenue, that serve the rest of us? Like the Department of Education, Libraries & Education Services $104 million, Health & Hospitals $33.4 million, Medicaid $45.2 million, Corrections $27.6 million and State Debt Service $35.77 million, to name a few departmental beneficiaries. The sleight of hand is great for magic tricks, not balancing budgets.

Gov. Malloy has proposed more tax increases on consumer goods- 7 cents per gallon of gasoline, $3 per tire, 25 cents per pack of cigarettes and increasing the real estate conveyance tax, hotel room tax and installing highway tolls. It’s time for new thinking and to get away from the “business as usual” status quo bankrupting the state.

The surprisingly unimpressive politicians who’ve been at the helm for decades, looking out for their own re-election and pensions, need to be replaced by new minds that have the fortitude and backbone to make the hard decisions, actually vote those necessary changes into law and then make sure the laws are followed.

Let’s try adjusting our spending to our revenue, not the failed other way around. Since 1992, Connecticut has had the slowest employment growth in the country and that was the year we began collecting state income tax under then Gov. Lowell Wicker. Perhaps the distinction between politicians and weathermen is closer than one might have thought. Both can be wrong and mislead, but still keep their job. It’s about time we at least change our elected politician’s fate.

One would also think that elected politicians would feel obligated to their constituents to make the financial climate here in Connecticut healthy, where folks would want to live and retire. For that wish to come true, however, we must stop the “tax & spend” philosophy. It’s just got to end. We should eliminate or at a minimum, reduce to competitive levels our corporate income tax, as well as elimination of the state income tax, over a period of years, and eliminate the gift and estate taxes- all of which are crucial components for attracting businesses and retirees.

And about your home- contrary to Mr. Barnes’ remarks when he was discussing Gov. Malloy’s new tax plans, he said, “Addressing our transportation infrastructure, maintaining it and growing it in key ways is going to be the most important thing we can do to assure our state’s attractiveness and real estate values.” Hogwash.

Home prices are stagnating or declining and high tax burdens make it much more difficult for people to qualify for mortgages. Have you driven around nice neighborhoods and noticed the abundance of “For Sale” signs? I suppose Mr. Barnes wants those folks leaving the state to do so on nice roads.

How misguided can Barnes & Malloy be? To make any state “attractive” there must be jobs that pay enough for families to live there. Businesses must be coming into the state, not leaving it, in order for people to work and live in those homes. “Tax and spend” is a short-term arrangement where some win for a while, but if you want everyone to keep dancing, you’ve eventually got to pay the band.

Why is our state government in the business of loaning money to already successful businesses? Is that not what commercial banks are for? And if a bank wouldn’t lend a company money, why in the world should the government be doing it?!

Some of these loans are at below market interest rates and forgivable! Do we really want our state government in the corporate banking business? The state program intended to facilitate large companies’ growth called the First Five Plus Program, since its launch in 2011, has doled out funds to Connecticut corporations providing more than a dozen companies with financial assistance amounting to several hundred million dollars. These loans were given in the form of standard loans, forgivable loans, tax credits and other methods.

Hold on to your hat- Hartford is even subsidizing hedge funds! Gov. Malloy gladly touted Greenwich based AQR Capital’s expansion project participation in the Department of Economic and Community Development’s (DECD) First Five program, providing up to $28 million in loans and up to $7 million in grants to support the firm’s $72 million expansion. They will retain 540 jobs as it creates new ones, Malloy said. Is that really a rational investment of tax payer money or was there something else going on?

DECD also committed $22 million in May, 2016 to help Bridgewater Associates hedge fund – which manages about $150 billion in assets and who’s CEO and founder Ray Dalio, in 2016 earned $1.4 billion – expand facilities in Westport, Wilton and Norwalk. That commitment includes a $17 million loan, a $3 million alternative energy installation grant, and a $2 million job training grant. DECD spokesman Jim Watson said, that for the entire loan to be forgiven, the company must retain 1,402 existing jobs and create 750 new jobs by the end of 2021 and retain them for two years.

If there was already a vibrant, low tax, pro-business environment in place, those hundreds of millions of dollars would never have to be loaned, nor any loans forgiven, in the first place. Those hundreds of millions of dollars could have been better spent on many, many other projects around the state, positively affecting tens of thousands of citizens, not 2,000 hedge fund jobs.

We are the “Gateway to New England” and still have many attributes that other states don’t. For instance, Connecticut has a well-educated populous. We have great schools, where we’re consistently ranked in the top 5 states. We’re 4th in the country for bachelor’s degrees earned and 3rd in the country for advanced degrees earned and we still have a diverse and well-trained work force. We also have an advantageous geographic proximity being so close to both NYC and Boston.

We need to reduce taxes in order to attract businesses so that it is in their best interest (and ours too!) to be here.

TO: Jeff Kurz, Editor – Record Journal
FROM: Lou Arata
DATE: January 8, 2018

RE: No Need for Connecticut Tolls

The Governor and his highway toll advocates have been preaching across Connecticut that we need tolls to pay for improvements in State infrastructure due to alleged decreasing gasoline consumption. The Governor argues we must have tolls or a big increase in gas taxes or the Special Transportation Fund will go bust.

Is it true that decreasing fuel taxes caused by decreased gas consumption are about to precipitate a Transportation Fund crisis?

Nothing could be farther from the truth.

Anyone researching this can find CT annual motor fuels consumption on the Department of Revenue Services (DRS) website. The truth is the annual volume of gasoline consumed in Connecticut has INCREASED nearly 50 million gallons from FYE 2013 through FYE 2017. Alternative fuels and diesel annual consumption have also gone up by millions of gallons per year also, according to the last 4 years of DRS summaries. Revenue generated via the fuels tax goes to the Special Transportation Fund (STF). So, contrary to the
Governor’s claim, gas tax collections are not declining because of decreased consumption. Quite the opposite is true; gas consumption is up, not down in Connecticut.

So, if decreased gas consumption is not causing a financial crisis is our Transportation Fund really in danger of running out of money?

Sadly, the answer is yes if the public allows the Governor to implement his out-of-control $100 billion spending plan (think of the “Magic Busway”).

The Governor plans on a 500% increase in transportation spending compared to when he entered office in 2011. We all can attest our need to address necessary infrastructure improvements, but do we really need to spend that much and that fast? Given Connecticut’s current financial crisis, that kind of increase is ridiculously ambitious and worst yet, it’s not just for one or two years. It’s every year for the next 30 years!

When Governor Malloy came into office in 2011, Connecticut spent about $280 million per year plus another $750 million of Federal funding on DOT capital project programs. This year in 2018, Gov. Malloy wants to spend $1.4 billion of Connecticut money, plus about $700 million in Federal money on DOT capital projects.

In other words, Gov. Malloy believes that Connecticut taxpayers can afford a 500 percent increase in state funded DOT spending in 2018, compared to the 2011 spending levels. Looking beyond the next two years is an even bigger increase in spending!

If there will be a STF funding crisis in Connecticut, it will be due to the unbelievable increase in spending planned by the Governor.

Can we redevelop Connecticut’s transportation structure without tolls, or worse yet, a 14 cent per gallon tax increase which the Governor also has proposed?

In May 2017, Connecticut Senate Republicans unveiled a Special Transportation Budget that did not require ANY tolls to support the expansion of spending needed to catch up on maintenance and repair of Connecticut’s interstate highways. That proves we can improve our transportation system without tolls or a big gas tax increase.

TO:                   Jeffery Kurz, Editor – Record Journal

FROM:             Lou Arata

DATE:              January 31, 2018

RE:                   Taxing Fundamentals

Governor Malloy is one of a handful of Governors filing a lawsuit challenging the constitutionality of the new federal income tax laws limiting state and local tax deductions. Gov. Malloy said, “It is fundamentally unfair and illegal.”

I find Gov. Malloy’s statement to be fundamentally flawed. It is still yet to be determined whether or not the law is, in fact “illegal.” We will have to wait and see what the courts have to say about the Governors version of what is or isn’t. According to many legal scholars, it is rather unlikely to be found illegal as under Section 8 of the Constitution, Congress “shall have the power to lay and collect taxes.”

Additionally, I find it unfair, very unfair, how Gov. Malloy’s administration and his Democrat controlled Connecticut Legislature, feel that it is “fair” to continually look at how they can come up with ways to rip the wallets out of tax payer’s hands to fund their gross mismanagement. Shouldn’t they begin cutting every last piece of fat from every department and existing program, first? When is the size of government big enough?

Incidentally, Connecticut has the highest administrative costs for transportation projects in the country! According to a nationwide study by Reason Foundation in 2015 (the most recent data available) Connecticut spent an astounding $99,417 per mile. The national average was only $10,864. That’s over 9 times the national average.

What is also fundamental, is that the tax-first attitude of Gov. Malloy and the current sitting Democrat majority, is flawed. While we should always look to find ways to assist those in need and fund our infrastructure, however, by continually increasing taxes no one is going to be left, nor able to afford, to help assist the neediest or pay for our necessary services and improvements.

That tax-first mentality is literally driving away, permanently, many of the State’s highest tax payers. In several recent discussions I’ve had with soon-to-be-retirees, none of them were seriously thinking of staying here in Connecticut. It’s either just too expensive to live here or the taxes levied on retirement savings is just too high.

To compound our state government mismanagement, the new tax options expounded by the crew of Democrat candidates for Governor- such as an increase in our sales tax, bringing back highway tolls or adding another tax increase of $.04 per gallon of gasoline- fail in the most basic sense. We need to cut taxes and contain expenses, not expand the collection from a declining base.

Connecticut is doing something very wrong. We need a dramatic leadership change in Hartford if we’re ever going to right-the-ship: and that process most likely isn’t going to be pretty. What has become the status quo here in Connecticut is unsustainable. In the final analysis, citizens get what you vote for in who you vote for.