July 1, 2017

BLUE STATE BLUES: High-tax Connecticut fails to pass budget as fiscal situation worsens.

Despite having a per capita personal income that is more than 143% of the national average—according to Moody’s— the state’s economy continues to lag behind others. Revenue shortfalls in the state register around $450 million for the current fiscal year alone, while estimated deficit totals are projected to clock in near $5 billion for the 2018 and 2019 fiscal years combined, according to The Connecticut Business & Industry Association. Debt outstanding levels and unfunded pension liabilities relative to revenues are among the highest of any state in the country, Moody’s Investors Service said in May.

Additionally Connecticut has yet to recover many of the jobs it lost during the financial crisis, according to Moody’s, and, as previously reported by FOX Business, income-tax collections are projected to fall in fiscal year 2017 for the first time since the recession.

The three major rating firms have downgraded the state’s credit rating in response to the ongoing budget crisis. In its most recent downgrade, which landed Connecticut with the third-lowest rating out of every state behind only New Jersey and Illinois. Moody’s said “the downgrades reflect continuing erosion of Connecticut’s finances, evidenced by the pending elimination of its rainy day fund, growing budget gaps and rising debt levels.”

Connecticut’s financial despair comes despite the state government’s approval of one of its largest tax rate increases ever in 2015, which has had a negative impact on some business investment.

Unexpectedly.

InstaPundit is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.