|
June 2009 —Vol. 87, No. 5
82% say higher taxes on
business will cost jobs
Survey shows public, business community in agreement
on state economic and fiscal priorities
A new Zogby International survey reveals that Connecticut residents want policymakers to take strong action to preserve jobs and promote economic recovery and act in a fiscally responsible way to solve the state’s budget crisis.
The survey, commissioned by CBIA, was conducted in late April and asked a group of randomly selected adults to comment on an array of economic and fiscal issues. It reflects the opinions of 601 state residents and has a margin of error of +/- 4.1 percentage points. Forty-one percent of respondents identified themselves as Democratic, 26% as Republican, and the remainder as Independent or minor party members. Twenty-three percent reported being from a union household.
Bipartisan support for fiscal responsibility
When asked whether they support or oppose a spending bill recently passed by the state legislature’s Appropriations Committee that would require a tax increase of approximately $1.6 billion a year, two-thirds of those surveyed said they oppose that measure. Respondents opposed it regardless of party identification, with majorities of Democrats, Republicans, and unaffiliated voters saying they disapprove of the spending bill. Among respondents from union households, nearly 70% reported being against the bill.
“For the last several months, CBIA has strongly advocated for a smaller, less expensive, and more effective state government as the primary means of closing the state’s massive budget deficits over the next two years,” says John Rathgeber, CBIA president and CEO. “Recognizing the threat to jobs and economic recovery posed by tax increases, we’ve said that raising taxes should be considered only as a last resort, after substantial budget cuts are made. And even then, we’ve argued, any increases should be temporary, avoid harmful structural changes to the tax code, be small enough for businesses and individuals to absorb, and be as broad-based as possible. It appears that state residents across the political spectrum agree with that thinking.”
While it’s understandable that residents would react negatively to proposed legislation that necessitates a large tax hike, it is noteworthy that they would be equally opposed to increasing taxes on Connecticut businesses. When asked whether they support or oppose the recent Finance Committee bill to increase business taxes by approximately half a billion dollars a year through the sales tax and corporate tax, two-thirds of respondents said they oppose it. Once again, respondents opposed the bill regardless of party identification, and two-thirds of respondents from union households said they opposed it. In addition, 70% of respondents said that any tax increases that are passed should be temporary, ending after three years.
“The unfavorable reaction across party lines to raising business taxes reflects the public’s understanding of how dire the state’s economic situation has become and their deep concern about further job losses,” says Rathgeber.
Indeed, when asked what concerned them most in terms of current economic conditions, the highest percentage of respondents overall (28%) cited job security.
Democrats, Republicans, Independents, and those from union households all agreed by wide margins that significant tax increases on employers will lead to more job losses. In total, 82% of respondents believe this to be so.
Smaller is better
So what should be done to address the huge state budget shortfall? CBIA believes that state government has grown beyond the ability of Connecticut residents and businesses to pay for it. (In less than 10 years, the annual state budget has ballooned by 46%, from nearly $13 billion to nearly $19 billion.) To restore the state’s balance sheets, policymakers must do everything possible to reduce government spending and eliminate waste, redundancy, and inefficiency in the state bureaucracy.
According to the Zogby poll, Connecticut residents are also in favor of a leaner, less expensive state government. Two-thirds of those surveyed say that state government should save money by concentrating on its core functions, such as education and public safety. In contrast, there is far less support for the state taking on a more expansive role, with only 28% of respondents saying that state government should expand its operations by providing retirement programs and health insurance benefits.
No question about it—the economy is issue #1
That the recession has had a profound impact on Connecticut residents—and their expectations of policymakers—is clear from the Zogby poll. To cope with current economic conditions in the state, 65% of respondents have cut back on all major purchases, and 49% have cut back on all purchases. Others report putting off retirement (23%) and taking additional employment (15%).
“Connecticut residents respond to economic uncertainty first and foremost by reining in their spending,” says Rathgeber. “It’s not unreasonable for them to expect the same from state government.”
Residents also expect policymakers to make the state’s economic recovery a top priority. An overwhelming majority of respondents (96%) believe it is important for state government to focus on retaining jobs and strengthening the economy.
What’s behind that sentiment? Results from the Zogby poll suggest that at least one reason is the extent to which people’s jobs have been adversely affected by the downturn. One quarter of those surveyed report that they or family members have lost a job or been laid off. Thirty-six percent say they or family members have had wages frozen or cut, and 36% report that they or family members have been temporarily laid off or furloughed or have had work hours reduced. Twenty-one percent have seen cuts in benefits.
“The message to lawmakers is unequivocal,” says Rathgeber. “Connecticut residents are in no mood for legislation that will cost more jobs or prolong economic hardship in the state. Solving fiscal problems through tax increases that will force employers to cut more hours, lay off more workers, or move to a state with a more positive business climate is not going to be well-received by the people of our state. We’ve already begun seeing hints of an economic turnaround nationally; we need to make sure Connecticut is at the forefront of that trend and not left behind by more forward-thinking, pro-business states.”
For complete survey results, go to www.cbia.com/newsroom and click the Surveys tab.
|
