Connecticut is in a deep financial pickle and is in danger of seeing a mass exodus of businesses looking for states where taxes are lower and private sector employers are welcome.
Connecticut, a state of 3.6 million people, just passed a two-year, $40 billion state budget, which is roughly the amount Washington Gov. Jay Inslee, a Democrat, and lawmakers in Olympia are grappling over. But an accumulation of tax increases has Connecticut taxpayers steaming and looking to leave.
This is what happened.
Right after Gov. Dannel Malloy assumed office in 2011, he and fellow Democratic lawmakers passed a $2.5 billion income-tax hike — the biggest in the state’s history. The problem is the revenue got spent, taxpayers fled the state and the flimsy economy never really pulled out of the Great Recession.
During his 2014 re-election campaign, Malloy promised not to raise taxes and said there would not be a budget deficit, but a year later lawmakers, with Malloy’s blessing, passed $1.2 billion in new taxes, mostly on employers, to plug a gaping $2 billion budget hole.
According to the Investor’s Business Daily, the seeds of Connecticut’s ongoing budget crisis date back to 1991, when then-Gov. Lowell Weicker Jr. introduced the state’s first-ever income tax as a new revenue source that would solve Connecticut’s budget woes for decades.