I’m disappointed. I had hoped that at the very least Illinois could serve as an object lesson. Apparently not:
The Census Bureau says Connecticut was one of six states that lost population in fiscal 2013-2014, and a Gallup poll in the second half of 2013 found that about half of Nutmeg Staters would migrate if they could. Now the Democrats who run the state want to drive the other half out too.
That’s the best way to explain the frenzy by Governor Dannel Malloy and the legislature to raise taxes again and blow through a state constitutional spending cap. They’ve been negotiating behind closed-doors over the details of a two-year $40 billion budget that could be revealed this weekend, but it’s already clear that Connecticut residents will pay big time.
Mr. Malloy promised last year during his re-election campaign that he wouldn’t raise taxes, but that’s what he also said in 2010. In 2011 he signed a $2.6 billion tax hike promising that it would eliminate a budget deficit. Having won re-election he’s now back seeking another $650 million in tax hikes.
But that’s not enough for the legislature, which has floated $1.5 billion in tax increases. Add a state-wide municipal sales tax that some lawmakers want, and the total could hit $2.1 billion over two years.
One reason Mr. Malloy needs cash is because the state economy isn’t growing. According to the federal Bureau of Economic Analysis, the state grew a scant 0.9% in 2013, the last year state data are available. That was tied for tenth worst in the U.S. The state’s average compounded annual growth for the last four years is 0.42%.
Slow growth means less tax revenue but spending never slows down. Some “40% of the state budget goes to government employee compensation and benefits, including payroll, state pensions, teacher pensions and current and retiree health care,†says Carol Platt Liebau, president of the Hartford-based Yankee Institute. “These items are growing at a rate that exceeds the growth of the economy.â€
As H. L. Mencken observed nearly a century ago there is always a well-known solution to every human problem — neat, plausible, and wrong. Increasing taxes to solve the problems of a government whose wants have exceeded its means when its revenues are slowing because of inadequate growth is one of them. If fostering economic growth were easy and painless, everybody would do it.
I was recently assured that the tri-state area was growing, on net, because the area was just so friggin’ desirable. I guess everyone is moving to Jersey, then?
That comment was delusional, as is the commenter. In CT there is Fairfield Cty (Greenwich, Stamford, New Canaan, Wilton, Ridgefield) which is corporate and Wall Street oriented, prosperous – and gorgeous – and the rest – which is dead as a door nail. Google for example, Waterbury.