Tax re­lief solutions avail­able that by­pass tolls and mar­i­juana

Stamford Advocate - - Opinion - By Greg Kraut Greg Kraut is a mem­ber of the West­port Rep­re­sen­ta­tive Town Meet­ing, who ran for the 136th state House Dis­trict as a Repub­li­can.

It seems that since Gov. Ned La­mont’s elec­tion you can’t pick up a news­pa­per, lis­ten to talk ra­dio or turn on the tele­vi­sion with­out hear­ing about in­stalling tolls for trucks or le­gal­iz­ing mar­i­juana in Con­necti­cut.

Both pro­pos­als are thought to be panaceas to the state’s fi­nan­cial woes, but whether alone or to­gether, I prom­ise with near cer­tainty that nei­ther will have the im­pact that leg­is­la­tors be­lieve they will. And if you throw in the pos­si­ble tax in­creases that also are be­ing floated, Con­necti­cut res­i­dents could be in for a lot of pain with lit­tle to no sig­nif­i­cant re­lief.

So, as we em­bark on a New Year, I come with some rec­om­men­da­tions for Con­necti­cut. They in­volve mod­ern­iz­ing and op­ti­miz­ing cur­rent rev­enue streams that other states have adopted and elim­i­nat­ing waste­ful spend­ing that our au­di­tors have already iden­ti­fied. These sug­ges­tions would gen­er­ate at least $1 bil­lion, and cause fewer headaches.

Mod­ern­ize the lot­tery — Ad­di­tional an­nual rev­enue of up to $300 mil­lion can be re­al­ized by mod­ern­iz­ing our state lot­tery sys­tem, be­cause it has been stag­nant and needs up­grad­ing. As such, we should begin ac­cept­ing credit cards on cer­tain prod­ucts and up­grade the pack­ag­ing of our lot­tery program. Con­necti­cut re­ceives ap­prox­i­mately $300 mil­lion per year from the lot­tery, from an av­er­age $300 per year spent per res­i­dent. Our neigh­bor states that ac­cept credit cards, in­clud­ing Rhode Is­land and Mas­sachusetts, gen­er­ate $500 and $700 per res­i­dent, re­spec­tively. In ad­di­tion to credit cards, Mas­sachusetts also has sea­son passes that are very pop­u­lar, and as a re­sult, drive more rev­enue than any other state.

Elim­i­nate up to $1 bil­lion of waste­ful spend­ing — Re­cent reports from state au­di­tors de­tail lax spend­ing con­trols, waste, un­nec­es­sary bu­reau­cracy and hazy ethics in mul­ti­ple state agen­cies at a time when the belt should be tight­ened to the last notch. Here are just some of the find­ings in agency au­dit reports: Ben­e­fit pay­ments to dead peo­ple, abuse of over­time, abuse of comp and va­ca­tion time, unau­tho­rized re­hir­ing of re­tired state em­ploy­ees and mas­sive fi­nan­cial re­port­ing er­rors. Our state gov­ern­ment is se­verely mis­man­aged, and through tight­en­ing up of our pro­ce­dures and elim­i­nat­ing waste, we can save at least $1 bil­lion an­nu­ally. By seeking just a 3 per­cent re­duc­tion in over­all op­er­at­ing ex­penses in the next bud­get, Con­necti­cut could close its fis­cal gap by ap­prox­i­mately $1 bil­lion an­nu­ally, ac­cord­ing to the Con­necti­cut Com­mis­sion on Fis­cal Sta­bil­ity and Eco­nomic Growth.

Un­lock un­claimed money — In 2017, there were $176 bil­lion in gift cards sold in the United States. But what hap­pens to the re­main­ing funds after such a card is deemed aban­doned? Con­necti­cut needs “es­cheat” laws to re­claim those funds, much like Delaware cur­rently has in place. We need leg­is­la­tion to re­quire the names and ad­dresses of the gift cards, so when they are sold, we can gain that rev­enue for our state. Gift cards are ap­peal­ing be­cause it is al­most im­pos­si­ble to de­ter­mine the right­ful owner of a gift. That means that the state will ul­ti­mately end up per­ma­nently re­tain­ing a much higher por­tion of gift card funds than of other forms of un­claimed prop­erty.

But we shouldn’t stop there. New Jersey has brought in sev­eral bil­lion dol­lars of rev­enue through gath­er­ing un­claimed funds. By col­lect­ing these un­claimed funds, we can gen­er­ate ad­di­tional an­nual rev­enues of up to $250 mil­lion for the state trea­sury. Last year, we brought in ap­prox­i­mately half that amount. Con­necti­cut needs to do bet­ter in this re­gard.

While tolls and tax­ing mar­i­juana might sound sex­ier than the pro­pos­als out­lined above, re­mem­ber that my sug­ges­tions are de­signed to cause as lit­tle pain to the Con­necti­cut tax­payer as pos­si­ble.

La­mont wants tolls for trucks com­ing into Con­necti­cut, es­ti­mat­ing that they would gen­er­ate $300 mil­lion a year. But as some state lead­ers have asked, where is that fig­ure com­ing from? Con­necti­cut re­moved its bor­der tolls in 1983 and in ex­change the fed­eral gov­ern­ment agreed to fund more trans­porta­tion in­fra­struc­ture costs in order to main­tain in­ter­states like I-84 and I-95. We re­ceived $528 mil­lion from the fed­eral gov­ern­ment in 2018 vs. New York and Mas­sachusetts, which have re­ceived less than 50 per­cent per per­son be­cause they have tolls. So not only will that $300 mil­lion fig­ure likely fall short, we can al­most cer­tainly ex­pect a court chal­lenge if we only re­quire trucks to pay tolls.

And hon­estly, do you think the Leg­is­la­ture and the gov­er­nor will stop at only re­quir­ing trucks to pay tolls? How long will it take be­fore they push for across-the-board tolls for ev­ery­one?

As for mar­i­juana, the state ap­pears to be bar­rel­ing down the road to­ward le­gal­iz­ing recre­ational mar­i­juana, like Colorado or, more re­cently, Mas­sachusetts.

The Con­necti­cut Of­fice of Fis­cal Anal­y­sis es­ti­mated that the state could even­tu­ally gen­er­ate about $100 mil­lion from taxes and li­cens­ing fees if it le­gal­izes the drug.

Colorado was first to em­brace le­gal­iz­ing recre­ational mar­i­juana, and as a re­sult, it had sig­nif­i­cant de­mand be­cause of mar­i­juana tourism, which has now sta­bi­lized. They taxed it at 30 per­cent while other states are now tax­ing cannabis at about 10 per­cent. As a re­sult, Colorado made ap­prox­i­mately $200 mil­lion in 2017, a state with dou­ble the pop­u­la­tion of Con­necti­cut.

With so many fewer peo­ple, and with a rapidly ma­tur­ing mar­ket, Con­necti­cut would be lucky to gen­er­ate a third of the $100 mil­lion the state an­a­lysts think. Guess how much towns would make? Less than 5 per­cent of the tax rev­enue.

As­so­ci­ated Press

Cars pass un­der toll sen­sor gantries hang­ing over the Mas­sachusetts Turn­pike in New­ton, Mass.

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