$Stock*Shop*Charts*News*Option$

[Stock Lobster]

GT: Greenwich CT resentful of status as state income tax cash cow

By Neil Vigdor, Staff Writer
Published: 02:20 p.m., Saturday, January 30, 2010
Greenwich Times

If Greenwich had a town song, "You Don't Bring Me Flowers" would be in the running.

For every $142 local residents pay out in state income tax, Greenwich gets about $1 back in municipal aid annually, according to a new study by the South Western Regional Planning Agency that has town officials once again saying that they are stuck in a one-way relationship.

"When the hard-working people of southwestern Connecticut and other pockets of Connecticut end up subsidizing large bureaucracies that do not demonstrate much accountability and tend to grow at unsustainable rates, then you're going to have, at some point, a breakdown in the system," said state Sen. L. Scott Frantz, R-36th District, which includes Greenwich and parts of Stamford and New Canaan.

"As tax rates go up to the point where people realize that they are paying much more than their fair share, they tend to leave the state."

Greenwich provided the state with $758 million, or just over 14 percent, of its income tax revenue in 2007, the most recent year that figures were available to the eight-municipality planning consortium.

On a per-capita basis, that works out to $12,420 for each of the town's 61,101 residents as estimated by the 2000 Census.

The next closest municipality was Stamford, which accounted for $241 million, or 4.5 percent, in state income tax revenue.

Greenwich received $5.3 million in state statutory grant aid for the fiscal year starting July 1, 2007, and ending June 30, 2008.

Stamford collected $15.7 million in state aid in return for the same period.

Rep. Cameron Staples, D-New Haven, co-chairman of the General Assembly's Finance, Revenue and Bonding Committee, said the system was never intended to provide a return on contribution.

"State aid is not supposed to be, in my view, equitably distributed to towns," Staples said. "State aid for the most part goes for services that the state needs to supplement at the local level. A town like Greenwich has the ability to fund most of its own services. The city of Bridgeport is not capable of fully funding its own education system."

SWRPA shared its analysis of the state income tax this month with chief elected officials in its member cities and towns, including Republican First Selectman Peter Tesei of Greenwich.

"I think it's a validation of what many people have expressed -- that we pay a disproportionate share of the taxes and receive a smaller portion of the revenue," Tesei said. "Therefore when we get to looking at the state budget situation, given the political composition, we're not adequately represented."

Republicans have been in the minority in the General Assembly since 1997.

Staples was quick to point out that the GOP has held the governor's office since 1994, however.

Perhaps Tesei should have said geographical composition instead.

With the exception of Deputy Senate Majority Leader Andrew McDonald of Stamford, the leadership ranks in legislature and executive branch have recently been dominated by lawmakers from outside Fairfield County.

"I certainly agree that Fairfield County has a lot to gain by being a lot more politically involved in Hartford because they're paying a lot more than their fair share of the bill," said Tom Foley, a Greenwich Republican running for governor.

Foley said the average household pays $8,600 annually in aggregate taxes to Connecticut, making it the worst state in a ranking by the Washington, D.C.-based Tax Foundation.

He added that the average income in the state is $68,000.

"One in eight dollars in the household is going to state government," Foley said. "That's way too high."

Members of Greenwich's political establishment uniformly called on the state to rein in its spending and do more to grow the tax base.

"We're facing, over the next four years, a deficit forecast at $12.5 billion," Frantz said. "We immediately need to shore up our fiscal situation by stopping any unnecessary spending and, for the longer term, we need to adopt a sincere pro-growth approach towards running this state."

Frantz criticized his Democratic colleagues for supporting tax increases.

"To be honest with you, I think the majority party in the General Assembly missed the opportunity of a lifetime by increasing the top marginal tax rate on income and capital gains by 30 percent," Frantz said. "We could have almost overnight expanded our tax base significantly by attracting families, corporations and partnerships to the state of Connecticut from New York and New York City alone."

Staples said changes to the income tax were proposed by Republican Gov. M. Jodi Rell and were still quite competitive compared to the rates in New York and New Jersey.

Calling Frantz's comments "rhetoric," Staples said that Republicans have come up with few proposals for streamlining state government on their own while controlling the governor's office.

Democrats, he said, are doing their part.

"There certainly is an ongoing effort to find economies of scale, encourage regionalization of services and encourage consolidation of state agencies in an effort to streamline the state bureaucracy," Staples said.

-- Staff writer Neil Vigdor can be reached at [e-mail] or at 625-4436.

http://www.greenwichtime.com/local/article/Greenwich-resentful-of-status-as-state-income-tax-343275.php

http://www.stamfordadvocate.com/local/article/Greenwich-resentful-of-status-as-state-income-tax-343275.php