Candidates Discuss State’s Fiscal Woes During LWV Debate

Connecticut’s worsening fiscal crisis, preserving state aid for public education and how to fund critical transportation infrastructure projects were among the tough topics tackled by candidates for the state House of Representatives during a well-attended debate hosted by the New Canaan League of Women Voters at Town Hall Monday.

One thing that was clear from the debate is that Connecticut is in rough shape fiscally and that it’s going to take time and hard work to get things back on track.

Tom O’Dea, a three-term Republican incumbent and New Canaan resident representing the 125th District, which includes parts of Wilton and New Canaan, defended his seat against Democratic challenger Ross Tartell, a Wilton resident and independent consultant who previously worked at GE Capital and Pfizer, and who also currently serves as a college professor at Teachers College, Columbia University. 

Meanwhile, Fred Wilms, a Norwalk resident and three-term Republican incumbent representing the 142nd District, which includes parts of Norwalk and New Canaan, defended his chair from Democrat and political newcomer Lucy Dathan, a New Canaan resident with a professional background in finance.

The event, which also included a debate between the candidates for State Senate, was moderated by New Canaan resident and former LWV president Kate Hurlock.

When asked what new revenue streams he would suggest to make Connecticut more fiscally sound, O’Dea, who serves on the legislature’s transportation committee, as well as the judiciary, legislative management and regulation review committee committees, said, “We don’t need more revenue streams. We have a $20 billion per year budget, and it should be $17 billion. So, I oppose any new revenue streams.”

O’Dea, who supports cutting the state’s income tax and corporate taxes, said he supports the idea of an “across-the-board cut of 20%,” or about $2 billion, to the state budget – but noted that he would “not cut judiciary and the Department of Environmental Services, because they’ve been cut heavily during the past several years.”

“I know it sounds drastic but we are in drastic times right now,” O’Dea said, adding that he would also offset the need for new revenue streams by routing out the “fraud” that’s running rampant through the state government.

“There’s a ton of fraud,” he said. “Believe it or not, we have had audits done that have gone essentially unread for years. We have computers that have gone missing. And we have state vehicles that are being used improperly. So I would aggressively go after fraud. I would put the state AG in charge off investigating fraud and going through the audit reports that each department has.”

O’Dea added that if re-elected he would also fight to “cut the tax on social security, and pensions completely, not phased-in… and I would limit the estate tax and the gift tax.”

“All those cuts are about $600 million – and those cuts will immediately stabilize the real estate market,” he said. “Once we stabilize the real estate market, then we can start going aggressively at lowering the income tax and the corporate tax to stimulate job growth.”

Ross, on the other hand, said he “would not cut the income tax, instead, I would look at how we allocate funds so we can pay for transportation.”

“I think the single most important thing for real estate in this town and in Wilton is transportation,” Ross said. “If you can improve the commute by 15 minutes, suddenly thousands more people [will] want to live here.”

Ross said he supports the idea of the state putting tolls on the major highways, “because that way you can get a focused revenue stream that then goes to feed the transportation funds.” He said the revenue would reduce the state’s reliance on bonding for infrastructure projects, and pointed out that the “toll fund” in Massachusetts now operates at around $400 million.

“I would not change the revenue streams in other areas – I would not do as Tom has suggested – because once you look at the variable costs that we face in this state, it amounts to about a 25% cut to all those revenue streams, and you know what that means for transportation and education,” Ross said.

In a rebuttal, Ross later said that the state’s total fixed costs have ballooned to about $8 billion and that the main driver of that is the state’s obligation to fund its employee pensions. 

“And if we don’t address the pension issues, then we will be in trouble,” Ross said.

Wilms said, “To the extent we have a revenue problem, it’s that people are leaving and taking revenues with them.”

“Especially people who have a lot of capital and who pay a lot of taxes,” he said. “If someone from Greenwich, who owns a hedge fund, leaves, and takes their business with them, and it takes away $50 million in state income tax, that’s a real problem. And we see it up at the state, where are revenues are growing organically at a rate of zero, but our expenses are growing organically at a rate of about 8%. That’s the mathematical definition of a fiscal crisis.”

Wilms said in order to get the state’s fiscal picture back into focus, two things need to happen: “We need to grow our revenues and we need to cut our expenses.”

“I agree with Tom [O’Dea]… I’ve identified about 20% of the budget or about $2 billion in expenses that we can reduce,” Wilms said. “Employee compensation. Folks, people don’t get free health care anymore, people are on ‘401K pensions,’ and when you retire, a private company doesn’t pay for your health care. We need to make these kinds of reforms at the state.

“Also, ARC, the not-for-profit, offered to have more of the nonprofits under its umbrella do more social services for the state – and we’ll save $1 billion that way,” Wims said, adding that cutting certain home health care costs currently covered by the state could save another $700 million. 

“So we have specific areas where we can cut,” he said.

Dathan said she was opposed the idea of cutting or eliminating the state income tax “because that is funding our education system.”

“We have to worry about funding our schools, because one of the biggest assets we have is our wonderful education system,” Dathan said. “Cutting the income tax, which is 60% of our budget, would really decimate our education system. It’s not just our K-12 schools but also our higher education system.

“Also, my opponent wants to raise the sales tax, which would disproportionately impact seniors and those who are on fixed incomes,” Dathan added.

Wilms reminded everyone in the room that some 30 years ago the state “didn’t have an income tax.” That led to more people moving into the state – bringing businesses and jobs with them.

“We need to be competitive against New York – we need to lower our income tax so that we are a more desirable place to live,” Wilms said. “We also need to scrap the estate tax and gift tax. Connecticut its just not a good place to retire and live. Lastly, I’d like to kindly disagree with my opponent – the income tax has nothing to do with the schools. Certainly, in New Canaan we get no aide, from the state, it’s all paid for using the property tax.”

Dathan, however, said she found it “pretty shocking” that Wilms was “dismissing the ECS money, at $11.5 million, that Norwalk receives… every year to fund our schools.”

“That money is vital,” she said. “And if that went away, each home in Norwalk would have to generate about an additional $1,000 in property tax per year in order to fund our schools.”

“We have a wonderful opportunity now to fund our schools and our post-educational programs so that we grow our workforce,” Dathan added.

When asked how she would go about funding the state’s transportation infrastructure needs, Dathan said she supports the upcoming ballot measure of a “lockbox” – i.e. a designated transportation fund.

“But I do think there are some holes in the lockbox. It’s only as good as the law makes it – and with 149 lock pickers, it could get raided,” she said, in reference to the 149 representatives in the House.

Dathan said she, too, supports the idea of tolls for funding transportation projects.

“We are the only state between Maine and North Carolina that does not charge tolls,” she said. “And I think we’re missing something on the table here. Cars are getting more efficient; they’re being electrified; and the gas tax [revenue] is going down. Therefore we need a long term plan for how we’re going to compensate for that.

“I spent 15 years as a CFO; I think strategically and I think long term,” she said. “I don’t want just the quick fix for our state. We need to raise the appropriate amount of revenue and we need to make sure it stays within our transportation system.”

Wilms said the problem with tolls, in his view, is that the Democrats want to use the additional revenue to “plug the holes in the budget.”

“We have a real excess spending problem and they’re like, ‘We need more sources of revenue so we can pay for all this reckless spending,’” Wilms said.

“I agree with Lucy about the transportation lockbox and that’s why I am going to vote for it this November,” he added. “Yes, it has a lot of holes in it – but I think we all want to see transportation money going for transportation.”

Wilms said in his view, “the best way to fund transportation is capital bonds” because they allow a state or municipality to pay down the cost of a project over time.

“The problem, is our governor has been spending money issuing bonds for all types of pork-barrel projects, feel-good projects – like for a splash pad in New Haven,” Wilms said.

“In Norwalk, there was $5 million in bonding for a bankrupt housing project – and then $5 million more for another bankrupt project for a theater on Wall Street. We propose to prioritize bonding toward transportation,” he added.

Dathan said she supported the idea of tolls because “we shouldn’t be paying for people to get from New York to the Cape, by using our roads.”

“Tolls are a good opportunity to push-off some of those costs, so we, as Connecticut citizens, don’t have to pay for it all,” she said.

When asked what initiatives he would support to protect state funding for the New Canaan education system, Ross said he would support regionalizing state funding for special education “so that one town doesn’t get stuck [with higher costs] … and that all the children across a region are properly serviced.”

“We are so good at special ed in New Canaan and Wilton, that people flock here,” said Ross, who previously did long range planning for the Wilton School system for 22 years. “People come here because of the schools.”

O’Dea said if “it wasn’t for the Republicans” in the Senate and the House, New Canaan and Wilton’s share of Education Cost Sharing (ECS) funds would have been “swept away” by Gov. Dannel Malloy’s administration.

“Were it not for [state senators] L. Scott [Frantz] and Toni [Boucher], that money would have been swept away by the governor,” O’Dea said. “That’s $1.2 million.”

“Another thing that would have happened, were it not for Toni and Scott, the governor would have made local towns pay for the state teacher pension problem that was created by the Democrats,” O’Dea added. “So, if you want o see your money fly out of New Canaan and go elsewhere, elect more Democrats to the state legislature.”

Getting back to his solution to the state’s education problems, O’Dea said, “At the end of the day, we need vouchers.”

“The ECS fund baselines at $11,000,” he said. “Give everybody the opportunity to use that school voucher to go elsewhere.”

“We need to give districts the ability to cut waste,” he added. “Right now only the top 10% of school districts can cut school funding. We should allow 50% to cut school funding and reallocate the money to create smaller class sizes. We’re bloated with bureaucracy and we need to cut it.”

Dathan disputed O’Dea’s estimate of $1.2 million in annual ECS funding from the state. She said New Canaan “only gets $345,000” a year, as per the current  ECS calculation from the state.

“I believe that we need to not just look at K-12, we need to make sure that we’re also looking at [higher education] programs,” Dathan said. “My opponent has voted along party lines – as he does 97% of the time – to significantly cut funds for local community colleges including Norwalk Community College, UCONN and other programs by over $300 million. If we want to attract businesses to our state, we need to invest in good education.”

Wilms said he has “voted repeatedly – as have my Republican colleagues – to protect town aid for education, including ECS funds.”

“My Democratic colleagues have wanted to cut town aid – and when I mentioned the $4.2 billion in savings that I specifically laid out – none of that involves cutting town aid,” Wilms said. “And as one of the leading Republican members of the House Appropriations Committee I can tell you that we don’t need to cut town aid to fix our fiscal crisis.”

The debate between the candidates for the 26th and 36th Senate Districts will be covered in a separate article here on New Cannanite.