March 08, 2012
The competition is fierce. California. New York. Illinois. Michigan.
But there’s a dark horse in the contest for Most Self-Destructive
State. The data make it clear that over
the last two decades, Connecticut
stands above all others in adopting unwise public policies.
It started in the 1980s, when profligate pols used the windfall
generated by the Reagan
boom to grow state spending at a rate that far surpassed population growth
and inflation. When Connecticut’s economy
began to decline in 1989 -- a recession that started earlier, and ended later,
than its national counterpart -- Hartford’s
solons were unwilling to muster the courage to make cuts. A bipartisan cabal pushed
through a revenue-raising tool that was once unthinkable: a broad-based income
Since an economic crisis was already underway, the income tax isn’t
solely to blame for all of Connecticut’s
subsequent woes. But its enactment signaled that a fundamental shift had
occurred. No longer would The Land of Steady Habits have restrained government.
In 1991, when the income tax squeaked through the legislature and was
enthusiastically signed by Governor Lowell Weicker,
the state budget was $7.7 billion. Sixteen years later, when the Great
Recession struck, expenditures had soared to $16.5 billion -- an
inflation-adjusted increase of 41 percent.
At 7 percent, population growth didn’t spur the spending surge.
The state, as well as the 169 municipalities that Hartford heavily subsidizes, went on a hiring
binge. Government employment rose by 28 percent, while private-sector job creation
And those positions in “public service” are lavishly compensated.
A March 2011 analysis by
the Bureau of Labor Statistics documented that in the Hartford region, nongovernment wages averaged
$23.23 per hour. Public employees received $34.47. Service workers in the real
world earned less half their
counterparts in the bureaucracy. Even in management and professional occupations,
government sinecures had the edge: $40.03 versus $35.46.
On Americans for
Tax Reform’s cost-of-government index, Connecticut ranks as the priciest state. Its
performance isn’t much better on other measures, including the Small Business &
Entrepreneurship Council’s “Small Business Survival Index,” Chief Executive’s “Best/Worst States for Business,” Mercatus Center’s “Freedom in
the 50 States,” and Tax Foundation’s “State
Business Tax Climate Index.”
“Pish tosh,” sigh the state’s elites, “Big Government isn’t a concern
here, because we’re so rich.” The argument has superficial appeal. Connecticut’s got old
money and Wall Street wealth. Wages are high, and median household income consistently
lands in the nation’s top spot.
But factor in the cost of living, and it’s easy to see why many
residents of New Hampshire, Virginia,
North Carolina, Florida,
and Texas are
New Jersey and New York impose heftier state-local tax burdens. Only Hawaii has a higher
electricity rate. Groceries, gasoline, and healthcare are mighty steep in Connecticut. (The
Pacific Research Institute’s “Index of Health Ownership” ranks Connecticut a dismal
42nd, and the Council
for Affordable Health Insurance reports that 45 states impose fewer
coverage mandates.) Housing, particularly in populous Fairfield
County, can be astronomically
In an issue
brief released last month by the far-left Connecticut Voices for Children, demographer Orlando J.
Rodriguez concluded that a graying population and a shrinking number of prime-age
adults augurs ill: “Connecticut may find itself transitioning from the Great
Recession’s economic downturn into an economy where growth and the capacity to
support vital public services are hampered by a dual decline in the earnings of
its workforce and in the number of workers.”
Those “vital public services” include ponying up for unrealistic
promises made to retired government employees. The Institute for Truth in Accounting
has named Connecticut
the top “sinkhole
state,” because of the $29.4 billion it has in assets, “$10.1 billion are
available to pay $63.4 billion” in unfunded liabilities -- primarily pension
and healthcare obligations.
Laugh at the
moonbeams in La La Land. Snicker at the cluelessness of the
folks who sent Barack Obama to the U.S. Senate. But the state with the most
dismal recent economic performance, and perhaps the most frightening fiscal
future, is a small, heavily
forested spot wedged between New York City
If you’re lucky enough to have a government gig or qualify for
its wildly generous welfare programs, Connecticut
remains a wonderful place to live. Toil in the competitive, accountable sector,
and the smart move is to flee to a state where taxpayers and entrepreneurship are
welcomed, not targeted.
For 20 years, Connecticut
followed liberals’ policy playbook, and pursued tax hikes, education-monopoly
engorgement, economic planning, and Nanny Statism.
And the results have been disastrous.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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