Monday, July 10, 2006

John DeStefano on the Primary and Education

On Saturday, bloggers from all over Connecticut sat down with Democratic gubernatorial candidate John DeStefano, the mayor of New Haven. This will not be a piece comparing DeStefano with Malloy--rather, it will explore a few of DeStefano's positions on the issues and provide some commentary.

Diet Coke vs. Diet Pepsi

DeStefano started the meeting with a short speech about politics and communication. One of the more enduring images from that speech was his belief that "politics are about big ideas... and choices... not Diet Coke vs. Diet Pepsi." DeStefano, who characterized his rivals Jodi Rell and Dan Malloy as the two barely distinguishable beverages later on in the discussion, is portraying himself as an alternative to more of the same.

So many decisions are made "within a small universe of people," DeStefano said. It's time to open that up.

He also commented on the state of the primary, and what differentiates him from his Democratic rival. "I am...dramatically different from Dan," he said. "What you see is a sum of issues that speak or families in the middle." An example of this, he said, was that "...I don't give speeches to labor. I idenfity with labor." The more bold, progressive stands he is taking on issues relevant to the middle class will help him win the primary.

Schools and Property Taxes

I asked Mayor DeStefano about education and property taxes. He said that homeowners are overburdened by the property tax, and that Connecticut towns are too dependent on it. In fact, he said, only New Jersey is more dependent than Connecticut on the property tax. DeStefano wants to "shift the way you pay for schools" onto the state income tax, basically by raising taxes for people making over $500,000/year. He also wants to create a floor for reimbursement of special education costs.

Lisa Moody

"I don't think Lisa Moody should resign. I think the governor should fire her."

Commentary

John DeStefano is a candidate who believes in the big idea. He is personable, engaging and very social, as well as willing to try to explain the underpinnings and theories behind his ideas instead of simply laying them out there.

His support from labor seems genuine, and may end up making a difference. The diner in which we met was right around the corner from Connecticut AFL-CIO headquarters (they had DeStefano/Slifka lawn signs, the first I'd seen, although now my neighbor has one too), which may have been why we were interrupted by an enthusiastic supporter of DeStefano's. They may feel he understands their issues far better than the other two candidates, and his stand against Wal-Mart and the abolition of the estate tax may be bearing this out.

He is an innovator, and seems more interested in the end goal than in how he'll get there. His answer for how he expected to pay for his transportation plan was frustratingly (and deliberately) vague--he believes that the details can be worked out depending on the situation. He may, in fact, be correct, but he may find that a lack of firm plans won't help him with a recalcitrant legislature.

John DeStefano is a charming and down-to-earth man with a good understanding of human nature, which might make a run against a charming, down-to-earth and popular governor an interesting race.

More commentary and reactions coming soon. Thanks to Frank Chi and John DeStefano for setting up and attending this meeting.

26 comments:

Anonymous said...

Yeah "soak the rich".... what a big, creative idea.

If you want to turn CT into NJ elect this joker

HealthcareNOW said...

Haha. I'm all for "soaking the rich." So please let's elect this "joker" so we can stick it Wal-Mart and other big corporations and stand up for middle-class people. It's better than the crap the kind lady is throwing at us from the state house.

GMR said...

Geez. Let's have the people who make over $500,000 a year pay for all this, because there must be a lot of these people.

Well, according to This report from Connecticut Voices for Children, the average income of the top 5% of Connecticut families in 2001-2003 was $231,928. So in any event, it's well less than 5% of the people who are supposed to, in JDS's world, pay for most of the education. Right.

I guess that in Connecticut, there's no way that more than 3% of households make over $500,000. If there are 1.3 million households, this works out to about 40,000 households. 3% is generous, since the AVERAGE of the top 5% is only $231,928. But in any event, let's say 40,000. Most of these households are going to be in Greenwich, New Canaan, Darien, Westport, Easton, Weston, Redding and Ridgefield (and not so much the last four). Greenwich probably has the most since it's the biggest town. There'll be a few scattered throughout the rest of the state, of course. But let's say 30,000 of these families are in Fairfield County.

Now, of the 30,000 families in Fairfield County, I would venture that at least half of them have their primary wage earner working in New York state, and most of those in Manhattan, but maybe a few in Westchester. The remaining may work in Greenwich and other towns in hedge funds or whatever. But NY state taxes are way higher than CT taxes, and thus these people pay NO TAXES to the state of Connecticut.

So we're left with 25,000 families, if we're really lucky. I think my 3% figure is way too high, and I'd imagine more than half the high income workers work in NYC. But let's stick with 25,000.

According to This Report of the CT General Assembly, in 2001, Connecticut spent $6.5 billion on education in 2001. So with inflation, I'd venture to guess that the total is around $7.0 billion today.

Split evenly among 25,000 families, this is $280,000 per family. Now, even if JDS only wants HALF of the money to come from families over $500,000, that's $140,000 per family. Of course, by this time, taxes will be so damned high that you'll be getting a little bit from the other 15,000 that work in NY, except you really wouldn't because by this time, they'd all have fled for the low-tax district of Westchester County.

Anonymous said...

"HCN"

How many states passed that Wal-mart bill?

zero?

Let's help the working guy by taxing the store with the lowest prices out of state....that will work great granola brain

cgg said...

If you work in NYC you still pay taxes to CT. NY refunds your money, and you send the correct amount to to Connecticut. Commuters used to pay a commuter tax to NY, but that's now a thing of the past.

GMR said...

While taxes paid to NYC may be refunded, I don't think that NY State refunds taxes to non-NY residents. In fact, Connecticut Voices for Children seems to imply on the first page that NY state income tax is credited against CT income taxes. And since the same document shows that NY taxes are higher, how could CT get much at all (except for interest and dividends).

Furthermore, this same document says that the top 1% consists of those making over $500,000, and there were 1.6 million personal returns (but my estimate of 1.3 million families is probably about right, since some families may file more than one return, and I guess a few households probably don't file at all)

Rell is going down said...

Cgg,

Thanks for that post. GMR is obviously ignorant. I worked in Harrison, NY for a year and a half and CT sure took money out of my income. I'm glad that he spent a long time explaining his position with absolutely zero facts. Sounds a lot like every Republican argument for the past 2 years. Like most people who post ignorantly, I'm sure he will not respond to our posts, but it will make me sleep well tonight knowing who we are up against.

cgg said...

If you don't work in another state income taxes probably aren't on your radar. Not a big deal that there's a misconception. It took me awhile to figure it out myself when I moved to CT.

The True Gentleman said...

I seriously want to know from a Democrat why the solution to every fiscal problem is to raise taxes against the wealthy? (Disclaimer: I do not make anywhere close to the $500,000/year that Mayor DeStefano proposes as the baseline for an increased tax). Why should Joe and Jane Doe living in Fairfield County and making $500,001/year have to pay additional taxes because the Board of Education in say, Hamden, cannot properly run itself on a $70,000,000/year budget?

Rell is going down said...

TG,

This is a debate I have every year around my Thanksgiving table. I come from a family of Italian Republicans, (and we were nowhere near the tax bracket DeStefano is talking about) and my father and uncles always point to this "robin hood" style of taxation where we rob from the rich to pay the poor. My argument is always pretty much the same. Where else is this money going to come from? The fact that towns cannot afford to pay their educational expenses cannot be chalked up to bad management because almost every town in the state faces the same problem. West Haven is a relatively well-to-do town, and they might be getting rid of kidnergarten. How can Connecticut allow one of it's towns to eliminate kidnergarten? There is clearly a problem. Where else will the money come from? My family never has a response to this. I think this is a case where we have to believe that the folks making $500k+ will benefit from the upgrade in the educational system because they are typically the business owners that will reap the benefits of having a top notch public educational system available for their employees.

I will admit, this is an issue that I find myself conflicted on. I think that most people living in CT making over $500k per year will not leave for another state, simply because there are not a lot of places where making that kind of money is an option.

The True Gentleman said...

Thanks for the honest response, Rell Is Going Down...it was refreshing to get one from someone who didn't think I was being a wiseguy.

I'll agree with you that not all towns are mismanaging the way they run their schools, but some clearly are. I just find it difficult to accept the position that, if we want better schools, tax the rich. If we want better healthcare, tax the rich. If we want better social services, tax the rich. If we want better transportation systems, tax the rich. There has to be a better way, and I am going to keep on trying to come up with one for at least one of these areas over the next 1-3 years...rather than reverting back to same old policies that most of our politicians currently are proposing. Thanks again, RIGD!!

GMR said...

Rell is going down:

According to This thread, where I previously brought up the topic, Genghis Conn said that he worked in MA and paid no income tax to CT.

As far as facts are concerned, I've added links in my posting to document the other facts. I think I've included a hell of a lot more documentation that JDS ever could.

Another mention of CT residents paying little or no state income tax in CT if they work in NY. Wikipedia says the same thing, but of course, you never know with Wikipedia if something is accurate...

OK, here is what the CT Department of Revenue Services says:

"A Connecticut resident who works in another state that imposes an income tax will be required to file a nonresident income tax return for the other state and a resident return for Connecticut. The Connecticut resident will receive credit from Connecticut for income tax paid to the other state on income earned for services performed in the other state. The credit allowed will be the lesser of the tax paid to the other state or the tax which Connecticut imposes on the resident's out-of-state wages."

Since NY state taxes are higher, CT residents working in NY aren't going to pay a lot of income tax. Only for dividends, interest, capital gains, and other non-wage income, or if they have a second job in CT. NY taxes may be lower at the lower levels of income, I don't know, but at the top level, they are certainly higher.

Chris MC said...

TG -

Your critique is on-target. The soak the rich "strategy" is a poor substitute for coming to grips with the disconnect between funding for education and the users of education.

Not surprisingly, I refer you to Dannel Malloy's thoughts on the subject, as posted by our own Gabe, and in greater length by BranfordBoy at MLN.

There is another, more strategic political problem with the soak-the-rich approach: it plays right into the GOP game plan (nationally). You already hear the (so far in vain) threats from Republican state legislators that wealthy people will take their money and relocate their home to escape the estate tax. It's the golden rule: he who has the gold makes the rules.

This sort of retread policy doesn't solve the problem it is supposed to address, and it is bad political strategy to boot.

Anonymous said...

RI just cut their top bracket income tax to 5.5%. Not much room for upping the CT rate unless our legislators all sell Newport real estate on the side

Authentic Connecticut Republican said...

HealthcareNOW said... "
Haha. I'm all for "soaking the rich." So please let's elect this "joker" so we can stick it Wal-Mart
"

WalMart will simply and rightfully lay off everyone who they find is also on Food Stamps, the Huskey Plan etc.

That way they're costing Connecticut zero.

We'll let you explain to the kids what happened to mommys job this Christmas.

stamfordpartisan said...

GMR does indeed speak with few facts. I think his suppositions about how many people work in NYC are way too high, and he does not consider the large number who commute into FF county from NY. the 200 Census showed a similar number commuting into STamford from NY as out of Stamford to NY. Greenwich, Norwalk, Wesport all have a lot of well-paid jobs, too. Sadly, the DRS under Rowland and Rell has slowed down the release of town-by-town income data in a period when there should have been more, better info available given improvements in technology.

GMR said...

de Stefano said the education would be primarily paid by those earning over $500,000. I estimated that to be about 40,000, with about 25,000 of these in CT and 15,000 commuting out of CT.

A subsequent piece of research I found said that the top 1% made over $500K, while I estimated the top 3%. If there are 1.6 million tax returns filed in Connecticut, one percent of these returns will amount to 16,000 returns.

The number of commuters from Westchester to Fairfield probably is roughly equal to the number of commuters the other way, but the number of commuters from CT to NYC will dwarf the number of commuters going the other way. Westchester has a lot of office parks in White Plains, Armonk, Purchase, Somers, etc. And it has large companies such as Pepsi, MasterCard and IBM.

So all of you JDS supporters, please tell me how you think the numbers may work that most of the tax burden can possibly fall on those earning over $500,000? What are your assertions about how many of these people there are? Do you really think that that many people earn over $500K? There may be a lot of millionaires in Connecticut, if you define millionaire as someone having net worth over $1 million. But there are not many people who make over $1 million in a given year.

Look at the 14A filings of different Connecticut companies at The SEC which have the salaries and bonuses of the top 5 officers. The top five officers at big companies like United Technologies make over $500,000, but the #5 guy isn't that much over $500K. Priceline doesn't have five people who cross that threshhold every year, but in some years they do. And priceline has 532 employees, so again, it's about 1%.

You can dream all you want that the over-$500K set can finance the education, transportation, healthcare, and whatever else you want. But the reality is that the numbers just don't back this up. There aren't that many people who make over $500,000.

To all those people who think Greenwich is filled with the über-wealthy: according to CNN, the median household income in Greenwich is $102,819.

According to the IRS, across the country in 2003, the top 1% were those earning over $295,495. There were 182,932 returns in the entire country of over $1 million, and the state of California had the most with about 29,000.

So all of you soak-the-rich schemers, where are all the rich people? Typically, when politicians talk about taxing those over $1 million, after getting to office they quickly realize that there just aren't enough millionaires, and thus the millionaire tax has to cover anyone making over $100,000 or some vastly lower money.

Believe me, if all of our health care, education or transportation could be had by soaking a few rich people, we'd have done it a long time ago.

Rell is going down said...

Do I know exactly how many people there are making over $500,000 in CT? No. But I don't think you are taking into consideration that there are a significant amount of people in CT making $10 mil and up. I have a few friends in the hedge fund industry, an industry which CT has niched itself very well, and they tell me that the managers of these hedge funds are making somewhere in the neighborhood of $100 mil per year. Even if there are 100 of these people, an increase of %0.5 percent would generate $50,000,000. Maybe there are fewer than 100 people making that kind of money, but my point is, you cannot simply look at the lowest threshhold here to calculate your numbers. The bulk of the money raised from this increase would come from the folks making this type of money.

Also, you said that "Since NY state taxes are higher, CT residents working in NY aren't going to pay a lot of income tax." I don't understand what you mean. They pay exactly the same amount that they would if they worked in CT. The credit is to compensate for the fact that they are taxed twice.

Genghis Conn said...

New York must do things differently. I live in CT and work in MA, but pay all income tax to MA. I pay nothing to CT--we just indicate that income tax has been paid to another jurisdiction.

Annoyingly, MA income taxes are nearly twice what CT's are. Which means I pay a lot more in taxes than I would if my job were located ten miles to the south.

GMR said...

Also, you said that "Since NY state taxes are higher, CT residents working in NY aren't going to pay a lot of income tax." I don't understand what you mean. They pay exactly the same amount that they would if they worked in CT. The credit is to compensate for the fact that they are taxed twice.

I meant that they wouldn't be paying a lot of income taxes to the state of Connecticut. Of course, they're paying out more income taxes, but Connecticut isn't receiving them.

As for the hedge fund industry, In the Entire Country Last Year there were 25 hedge fund managers that made more than $130 million. The median of this group was $205 million, which means that 12 hedge fund managers in the entire country earned over $205 million.

Many hedge funds are indeed make millions, and many of them are located in Connecticut. But hedge funds are not taxed directly, since they are partnerships. Rather, the partners, who can be located in any state or country, are taxed proportionally. So you can't tax the hedge funds themselves, only the guys that work for the hedge funds in Connecticut.

You may think that large corporations have a lot of big wage earners. They've got some, but not that many making over $500,000 or $1 million. At United Technologies, for instance, the top guy gets about $6 million, but the #5 guy gets just over $1 million. There'll be more at GE, but it's just not that many.

Seriously, show us some data from somewhere -- anywhere -- that makes you think that we can restrict the tax increases to the people earning over $500,000.

Again, the entire education spending in the state of Connecticut is about $7 billion. It's just inconceivable that even a quarter of that burden could be taken on by people making over $500,000.

bluecoat said...

the income tax is supposed to be met with a comensurate decrease in the proerty tax; but let's not put that in the equation until the confused people - and apparently they are mostly Democrats if this blog is an indicator - who work out of state but live in CT understand that the tax they pay to the state they work in is credited against what they owe to CT...so if they pay more to the out of state tax agency then they owe to CT then they never write a check to CT...

bluecoat said...

GC: have you ever looked at what the proerty taxes would be for you if your house were in a comparable community north of the border where you now work...the debate needs to be about the net tax burden as I think gabe pointed out in the past..that would be an interesting piece of info although not enough to decide policy, of course

Anonymous said...

Connecticut is New Jersey North Elect Destefano if you want Connecticut to become another New Jersey.I think we deserve better than Jodi Rell who has to play the Grandmother Card on Channel 30 News showing off her new Grandchild or John DeStefano who talks tough on how he is going to send Walmart The bill for health insurance on their workers when he cant even keep his word about a running mate selection.

Dan Malloy will win on August 8th He has 2/3 of Litchfield County now behind him.They(The DeStefano Campaign) waved the white flag and personally I dont think the whole 5th CD is behind him either.I think Malloy's the winner on August 8th.

I just hope Ned "Ferret Face" Lamont loses along with DeStefano for the Good of Connecticut

bluecoat said...

Yes, vote for Dan Malloy, he plans to take his Stamford model to all of CT - New York City East...

Anonymous said...

I plan to vote for Malloy/Glassman on August 8th and Lieberman also.

Ned Lamont will be just a fleeting memory on August 8th when he loses to our Senator Joe Lieberman.

If Ned had an issue besides pulling out of Iraq which is a turn tail and run strategy and totally unamerican Maybe we could see him as a legitimate candidate All this man has done is get people who support our troops pissed off and I know there a lot of people in my town who would call him Anti-American for his remarks.

As for DeStefano/Slifka stick a fork in them They are done without the 5th CD they are toast and they have done nothing in Litchfield County and without their support they aren't winning.

With Audrey Blondin and the Litchfield County leaders supporting Malloy/Glassman It is looking more and more like a Malloy win on August 8th.

West Haven Tax Payer said...

RE: West Haven is a relatively well-to-do town

??? What West Haven are you referring to? West Haven is a town without commercial income, with a median household income of only $42,393.

Right now, West Haven is struggling with newly elected Mayor John Picard, who has decided that he will raise taxes 30-40% *on average*.

West Haven is NOT a relatively wealthy town.