Stefanowski says he’d ‘cut taxes’ and Lamont would ‘raise taxes.’ That’s earned him some voters’ support and has pushed others from Lamont to Oz. But Stefanowski’s narrative grossly oversimplifies how public finance works, and it can easily lead us to vote against our own interests. If we understand a few basics about public finance, we can see that even if Stefanowski ‘cut state taxes,’ it would not necessarily save us any money in the end.
Here’s the reality. States get their revenue from a few sources: about one half comes from state taxes on income, sales, and property and one third comes from federal grants. Recently, there have been dramatic reductions in federal grants to states for both education and transportation.[i] States have to make up those funds in some way, regardless of who’s in office. When states get less federal funding, they generally consider two options. The first option is to increase the state’s total tax revenue in some way. There are various ways to do this, only some of which reduce the state tax burden on working- and middle-class residents. The other option that states usually consider—and which Stefanowski seems to favor—is to cut state spending so that we ‘need’ less money. This could mean spending less state funds on education, infrastructure, and other social services. It could also mean sending less state money to municipalities. Both options put more pressure on municipalities who are often left with little choice but to raise local property tax rates in order to keep their communities afloat.
So, even if Stefanowski gives the average resident a state ‘tax cut,’ we might just face higher municipal property taxes or the indirect costs of decreased services, like car expenses (for damages caused by our poorly maintained roads) and much more. In either case, CT’s working- and middle-class residents would pay the price. In that sense, saying he’ll ‘cut taxes’ is like a salesperson saying “Here’s a great deal: you pay nothing and I’ll give you nothing!”
The average CT resident doesn’t need just any ‘tax cut.’ We need specific kinds of reforms that shift the total tax burden off working- and middle-class residents without sacrificing things like education, transportation, health, and other social services. The phrases ‘tax cut’ and ‘tax increase’ say nothing of substance. They don’t tell us anything about who will or won’t be paying or how they’ll be doing so. They conceal more than they reveal and they rely on our fear to fill in the details. We can’t let them mislead us.
Rachael D. Stephens
Ph.D. Student, University of Pennsylvania, Anthropology & Education
M.A., Teachers College, Columbia University, Anthropology & Education
[i] https://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2017/12/federal-spending-priorities-shifted-toward-health-over-past-decade, https://www.cbpp.org/research/state-budget-and-tax/federal-aid-to-state-and-local-governments