Who Lost GE? Who Can Save Our State?

Voters statewide have started receiving a pitch this election season: ​“Don’t be a Lemar Democrat. Don’t support higher taxes.”

Republicans are distributing that message in towns where this fall’s elections will determine which party will control the state legislature — and try to steer Connecticut out of fiscal quicksand.

“Lemar Democrat” refers to New Haven State Rep. Roland Lemar, who is working on campaigns statewide to try to help keep the legislature blue. The pitch follows on an email message the state GOP distributed after an appearance Lemar made two weeks ago on WNHH radio’s ​“Dateline New Haven” program. In that appearance, Lemar repeatedly said he opposes raises taxes on middle-class Connecticut families, but does favor increasing taxes on millionaires.

“I LIKE TO TAX PEOPLE!” blared the headline of the GOP email.

We always knew it was true. Now they are ARROGANTLY admitting it on air.
Last week on WNHH, the chair of the Democrat House Majority Caucus, Roland Lemar, made his pitch to fix Connecticut’s long term budget crisis.
Democrats’ Plan: TAX PEOPLE MORE!

One of the two state’s two most visible Republicans, House Minority Leader Themis Klarides, acknowledged in an appearance Thursday on WNHH’s ​“Dateline” that that email may have taken Lemar’s words ​“somewhat” out of context.

But, she continued, Lemar and the state’s Democrats have consistently raised taxes, and dug Connecticut in a deep fiscal hole. (She also cited examples of leading Democrats making ​“embarrassing” personal digs at members of her party.)

Klarides and Lemar were in the studio together for Thursday’s program. They parsed each other’s parties’ political messaging. But that led to a more substantive debate about how Connecticut found itself having to scramble to fill a $930 million budget hole last month, leading to painful criminal justice, human services, and municipal aid cuts.

That debate — the roots of what promises to be an ongoing fiscal crisis, and which party’s ideas would better fix it — will be at the heart of state legislative campaigns this summer and fall. Klarides, who’s often mentioned as a potential 2018 GOP gubernatorial candidate, is throwing herself into those races in a quest to turn control of the state House of Representatives from Democrats to Republicans. Lemar, who chairs the House Majority Caucus, is working equally hard to see that quest fail.

The pair did find common ground on ​“Dateline.” A little.

They agreed that both parties have at times sought to tailor ​“clean election” laws to benefit their own electoral successes. They disagreed on how such laws should work.

Both said that if they served on the State Bond Commission, they would have voted against Democratic Gov. Dan Malloy’s $22 million package of grants and loans to keep the headquarters of the world’s largest hedge fund, Bridgewater Associates, in Connecticut. They disagreed about whether the legislature should have voted to overturn that decision. (Klarides: We should have. Lemar: Not the right forum.)

And Klarides opposed Lemar’s proposal to legalize recreational use of marijuana in Connecticut. She called pot a ​“gateway drug.” Lemar disagreed.

You can hear all that by clicking on the audio file of the episode, at the bottom of the story. Following are excerpts from Lemar’s original WNHH interview about raising taxes; then from Klarides’ and Lemar’s discussion on Thursday’s show about how the GOP portrayed that interview, and about the lessons from GE’s decision to move its corporate headquarters from Fairfield to Boston.

The Original ​“I Love To Tax” Interview

WNHH: Why shoudn’t I be paying more taxes? Why shouldn’t I be paying another half percent for sales tax so you could have enough cops in cities, so you can have enough treatment beds for people who would otherwise go commit crimes or fill jails? Why shouldn’t I be paying another half cent for that?

Lemar: You personally should not be paying any more. Because here’s why. In 2014 …

WNHH: Come on, tax me Roland! I’m asking you to tax me!

Lemar: I know you are …

WNHH: I know you liberals hate to tax people. But tax me!

Lemar: No, I like to tax people.

WNHH: But you [just] want to tax rich people…

Lemar: But when I looked at the tax incidence report issued in 2014, what it showed us was folks at the lowest income levels in our state pay a disproportionate, folks in the lowest income in the state pay the highest proportion. … [Lemar proceeded to propose raising the tax rate on incomes and capital gains over $1 million.]

Thursday’s Klarides-Lemar Appearance

WNHH: Do you think what you just listened to was Roland saying, ​“I want to tax families more?”

Klarides: Yes.

WNHH: You were talking [before] about people’s words being taken out of context. …

Klarides: We’re in a business where that happens on a regular basis. I don’t think that’s fair to anybody. But the reality is this: Did you vote for those last two budgets that raised taxes?

Lemar: Yes I did. On high-income earners.

Klarides: See, that’s where we separate. You raised taxes overall. You raised fees. You raised borrowing. The reality is this: I understand that that particular comment was taken somewhat out of context. But it’s not a lot, is the problem. Because when someone has voted for the two largest tax increases in state history, it is what it is.

Lemar: Look, I’m a big boy. I’ve been playing this game for a while both at the local and state level. I know things are taken out of context and used against me. The Republican State Central Committee has this sophomoric guy running it now who puts out fake tweets and retweets President Obama in racist images that turn out to be completely false. He bans media from his convention and has to sheepishly reinvite them.

It’s sort of what they do now. And I don’t blame that on Themis. Themis has been always above board and honest in her dealings. But that’s what they have at the leadership now. And that’s fine. I have to take that. He got it completely wrong. But that’s what he does now.

WNHH: But what about Themis’s point? She’s saying if you vote for budgets that have tax increases, then it’s fair to say that Roland Lemar believes that solutions lie in taxing Connecticut’s families.

Lemar: I don’t believe it lies in taxing Connecticut’s families. I think that there is an appropriate level of millionaires and billionaires … Our high income earners, people making over a million dollars a year, pay substantially less than they do in New York and New Jersey, for example. The capital gains tax is substantially higher in Massachusetts than it is in Connecticut. I would look at taxing just those incomes over a million dollars a year or capital gains in excess of a million dollars a year at a higher level.

Right now it’s 6.99 percent. I’d move that up to 7.99.

WNHH: OK Themis: 6.99 to 7.99 percent for incomes over a million dollars and capital gains over a million dollars. What do you think?

Klarides: Well first I need to address the first comment that Roland made. We were talking about our state party chairman. We both recognize our state party chairs on either side, it’s their job to be purely political. Whether it’s mine or yours, that’s what they do.

But unfortunately, calling our state party chairman sophomoric when you have a governor that is a name-calling bully is a little bit disingenuous. When you have a governor that calls Republicans racists and un-American, I mean that is embarrassing for the office. Forget who’s in it. We have to have respect for the office at that point.

Af far as tax increases go, I find it interesting when we compare that our taxes are lower, we have business that are leaving and going to Massachusetts …

Lemar: … going to cities that they invest in.

Klarides … businesses that are going to New York. And so the reality is this: You can beat up on people who have been successful in this country because they make money. You can’t or I can’t make jobs in the state of Connecticut.

WNHH: What about the specific proposal? Should people pay instead of 7.99 percent, 6.99 percent on incomes over a million and capital gains over a million dollars?

Klarides: I don’t support that.

WNHH: How come?

Klarides: This is a complicated conversation. It’s not just ​“Do you support this?” Or ​“Do you not support it?” We have to look at the whole structure of what affects the state of Connecticut. And whether you talk about corporation tax, when you talk about unitary tax, loss carry forward, this is not about an income tax issue. Quite frankly, I think people in Connecticut who are of means, the least of their concerns is that income tax issue. A lot of people have businesses. They can’t afford to operate businesses in this state. To talk about one issue — raising taxes on the wealthy — as if that’s the only problem we have here, is preposterous.

You did it last year. And look where we are now! We are in a worse state than we were.

Lemar: Look, no one’s saying this is the … end-all, be-all of state tax policy. Heck, I can’t even get most of my Democratic colleagues to agree with me on this issue.

WNHH: Actually, Dan Malloy agrees with Themis. He feels there is a point of no return [on tax increases], and people will leave …

Klarides: God help me.

”Your Governor”

WNHH: Themis … You said earlier in this show: GE said they were going to leave; Democrats didn’t pay attention. They kept raising taxes.

The response to that from Democrats has been that GE has always said they weren’t leaving because of taxes. They didn’t take huge numbers of people with them. They wanted to have a headquarters in a high-tech environment like that which exists by MIT in Boston. They were lured to Boston by the kind of urban, publicly-invested-in tech campus where they wanted to have a headquarters; then Republicans cynically used that move to bring up unrelated issues of taxation.

Klarides: It’s amazing that even when it’s black and white, they’ll find some way to spin it.

It was a slap in the face to hear Democrat leaders in the state of Connecticut, when all this was going on … to say, ​“They’re just bluffing. They’re not going anywhere.”

After we passed that budget [State Senate Minority Leader Len] Fasano and I met with the CFO of GE and talked to them about what was going on. It was before they left but after [last year’s] budget was passed. He said, ​“Here’s the problem. If you could snap your fingers and change back those laws that were passed in the budget last month, it would not materially affect whether we stay or we go. And here’s why: We do not trust the vision of the leadership of the state of Connecticut.”

It’s not just one bill. It’s not just one tax increase. It’s not just one thing.

And I guess the most offensive thing to me is it’s not about 100 jobs or 200 jobs. That’s certainly an important part of that. It’s about all those people who own homes …

WNHH: Isn’t there a move away from those suburban headquarters to more urban, idea-sharing tech environments? Isn’t that really what was going on here?

Klarides: No question I understand the notion of an urban tech center. But they were happy here for many years. And they have people who are uprooted and leaving here. … We’re talking about hundreds of jobs. We’re talking about people that own homes and pay property taxes to their town. They make charitable contributions, they go to the theaters and coffee shops …

WNHH: But they came at a time when those suburban office parks were the trend for companies like GE for their headquarters. If that trend is changing, is it fair to blame tax policy for that?

Klarides: Yes, it’s absolutely fair. If it were just GE that we’re talking about it, it would be one thing. But the reality is when you have people who believe that the leadership of the state does not share their vision … when you continuously feel as if the people that run your state do not share your vision, this has been a long time coming. And they weren’t listening.

WNHH: Did you have your head in the sand, Roland? GE told you for years, and other corporate leaders: ​“We don’t like the tax structure.” When they were leaving, they told Themis and the governor, ​“It’s too late. You have such a broken system. There’s no way you’re going to get us to stay.” Is Themis right, that you guys just weren’t listening, and that’s why this symbolically important move happened, that reflects a larger problem of retaining business in this state?

Lemar: Of course we were listening. In fact we’d been hearing for years that they had relocation experts that were looking at competing sites across the country. They didn’t wake up one morning and decide they were leaving Connecticut, quickly narrow it down to five locations, and take a $185 million deal and move a couple hundred jobs to Boston.

That’s not what happened. For years they were thinking about it. They were selling off GE Capital. They were selling off appliance divisions. They were radically rethinking their company.

It is a loss to lose GE. No doubt. What they did was move to an urban tech campus where they wanted to recruit a workforce of the future. They took $185 million in tax credits. They moved there. They worried about the future direction of the state. I’m going to tell you, the Republican [version of] the budget cut investments in higher ed … underfunded debt service by $70 million. They eliminated manufacturing assistance grant. They eliminated the earned income tax credit.

WNHH: Themis, if those cuts had taken place, would a company like GE looking to relocate a headquarters — would they be less likely to believe a workforce of the future will be there?

Klarides: No, because they understand that if we were in charge, if the Republicans were in charge, their vision of Connecticut would be different. They would trust the vision of the leadership of Connecticut.

Clearly we have to get the money somewhere. But we made sure — as your [Lemar’s] governor said in February — we have to prioritize where our money is going. If we cannot prioritize where our core government services should be, we will never move forward.

WNHH: You said, ​‘your governor.’ Is he only Roland’s governor?

Klarides: He’s his governor. not mine. I’m governor-less.

No. I’m kidding.

Click on or download the above sound file to hear the full episode of ​“Dateline New Haven” with Klarides and Lemar.