State of Connecticut Not Better after Tax Hikes

I am amazed that the lights are still on here in the great state of Connecticut.  What even amazes me more is that this state after the largest tax increase in history by the Malloy Administration has still resulted in a deficit.

The state is just weeks away from having to borrow more money just to pay for the monthly operating expenses.
In essence the state is spending more money than it takes in.  Rep. Vincent J. Candelora, R-North Branford,
a member of the Finance Committee said Friday that Nappier has not been forthcoming about borrowing plans.

“In my estimation, from the burn rate that we’re going at, it’s conceivable by August we would be looking at borrowing money,” he said. Part of the problem is the projected $220 million surplus of 2011 that was applied to the current budget that expires on June 30 but which hasn’t materialized.
“By taking $220 million from a checkbook that had zero dollars in it, we’ve exacerbated the problem,” he said in an interview.

The revenue estimates include a $350 million shortfall in personal income taxes. But gasoline sales tax revenue went up a projected $62 million.

Sen. Antonietta Boucher, R-Wilton, a committee member, said many are “still reeling from” last year’s record tax hike. “It makes me wonder if people have gotten into their cars and headed south or west, to states or places where the cost of their taxes is substantially less,” she said.

Sen. Gary D. LeBeau, D-East Hartford, said that most of the higher income taxes are being paid by the state’s wealthiest residents. “A couple, each making $100,000 apiece, will only have their taxes increased by $17 under the tax plan that we passed,” he said.

Sen. Eileen M. Daily, D-Westbrook, co-chairwoman of the committee, conceded that lawmakers would rather not borrow money. “Could it be possible that we have to? It could be,” she said in an interview. “For now, we’re all right with the internal borrowing we’ve done in the past.”

The nonpartisan Office of Fiscal Analysis on Friday released a report requested by Republicans, noting that about $50 million in pension contributions — half from employees and half from the state — have been withheld over the last year and retained in the state’s cash pool for the $20.5 billion budget.

In a statement on Friday, Nappier said that pension balances are “relatively small,” making long-term investments impractical. But they are not used to pay other obligations, she said, adding that until contributions to the retirement funds “materially” outpace the payment of benefits, funds will be kept in the cash pool.

“The value of the trust fund assets reported by OFA on June 21, $49.6 million, does not take into consideration the expenditures to date,” she said. “Indeed, the fund currently has a negative cash balance of $13.6 million, which means that retiree health expenses have exceeded appropriations and employee contributions as of this particular point in time.”

Nappier recently reported that the state’s cash pool “has fallen substantially” to $121 million on May 26. Last year at that time, it was $895 million. The state spends about $2 billion a month to keep government working.

Read more: http://www.ctpost.com/news/article/State-running-out-of-cash-officials-say-3655452.php#ixzz1yi5jQ5pI

13 replies
  1. stinkfoot
    stinkfoot says:

    Interesting that LeBeau is quick to say that the higher taxes are being paid disproportionately by the wealthy… more class envy BS.  It’s the wealthiest residents who own and run the businesses that would hire off the unemployment rolls… that is if the onus of mitigating huge deficit wasn’t placed directly on the shoulders of taxpaying citizens and businesses without meaningful reduction in expenses on the part of the state.  Discourage people from spending in an economy and the businesses in that economy don’t make the money needed to pay new hires…. gouge people at the gas pump and border town citizens cross the border and pay into New York, Massachusetts, and Rhode Island coffers.
    Punish success and you get less of it… the state has done NOTHING to encourage existing small businesses to hire and has taken money that would otherwise be spent in the private sector- killing any potential job creation so of course income tax revenues will lag.

  2. JBS
    JBS says:

    In a recession, most people have less or no income — savings are pilfered. Available monies are used to buy food and shelter. Food, aside from fast food and prepared food, is not taxable (don’t tell Malloy!) Taxable sales suffer.
    Income from real estate is taxable. No wonder taxes are being paid by the state’s wealthiest earners!
    Quite simply, people with less disposable income are spending less on taxable things. Increased taxes, any additional taxes, along with a faltering economy, will only exacerbate that situation.
    And, Malloy, the tax and spend Democrat’s Democrat, just wants to raise taxes! Like that is going to help this economy?
    There is only one thing thing to say: “D’OH!”
     
     

  3. winnie
    winnie says:

    When the employment numbers improve in our fair state, perhaps tax revenue will improve.  Methinks that they (excuse the expression) jumped the gun with that supposed $220 million surplus.  Look at the price of food and fuel and yeah, there’s a lot  less expendable income.  I’m in Tennessee right now and saw gas for under $3/gallon.  That’s never going to happen in CT — mostly because of our gas taxes.
     

    • JBS
      JBS says:

      Would you say Tennessee is doing better than CT economically? Might be a reflection of the lower taxes . . .

      • winnie
        winnie says:

        From what I’ve seen, yes.  However, they’re having problems down here with property values/house sales just like everywhere else.  I’m off to Crossville with my mom & her husband tomorrow to check out a satellite office of where my husband works in CT.  If I could move to a red state and get out of CT, I’d do it in a heartbeat!

  4. SeeingRed
    SeeingRed says:

    The circus clowns in Hartford have proven beyond a reasonable doubt that they have no plan other than to spend more, borrow more and tax more.  We’re moving, just a matter of when we can affect the plan.   As soon as housing preices recover ‘somewhat’ in the Farmington Valley it’s hello NC.

    • essneff
      essneff says:

      Oye Sammy! oh we’re going……. my brother in law has a residence just outside of Charlotte NC worth 3 times more than our condo in Rocky Hill is worth….. we pay 30% more property tax on our place than he does…… plus, no punitive property tax on cars!!  …… as soon as the wife’s job is outsourced, most likely in early 2013,  I was laid off last year in the 2011 Summer of the er ahh, ahh Malloy massive tax increase recovery, We are done with ct, but I want you to stay and pay every single one of the past and future ahhh additional Dannel taxes…….. after all, it’s only fair to have things like a state earned income state tax credit, right?  you can afford it right? Please stay in ct, they need you now more than ever!!

  5. JBS
    JBS says:

    winnie, sooner or later, everyone who can will move out of Corrupticut. People with the means are bailing out of the state as soon as they can. That is usually people who are not on the dole and have a pretty good income. A friend, who I have written about here, is fairly happy in Utah (except it’s full of Mormons!). That is a radical change. Tennessee sounds more temperate.
    With people of means leaving daily to less taxing areas, the only ones left here will be those on the dole and liberals who just can’t seem to let go of the Socialist Dream.

    • Lynn
      Lynn says:

      And those of us who just can’t stand to leave family! What is the definition of poor? Or rich?  You have to feed your spirit, too. Here’s hoping there are enough of us to pull the wagon. Maybe six months and one day, somewhere warm, if they don’t change that!

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