The reader may have read often in Connecticut’s media of the state’s burgeoning surplus. There are three things that may be done with a surplus of tax funds: 1) The surplus, a tax over-charge, may be returned to taxpayers, much in the way an overpayment may be returned to business customers by non-greedy, non-felonious capitalists; 2) the surplus may be applied to the liquidation of current debt; or 3) the surplus may be used to finance new spending.
The Democrat progressive community in Connecticut, operating
on the principle that taxes must always increase and never decrease, generally
prefers option 3).
If a portion of the surplus is used to spur new spending,
the accumulative debt in Connecticut will remain the same, and progressives
will have asserted progressivism’s abiding central principle: deficit financing
is good because a good government needs an ever increasing tax load to finance
progressivism. When taxation becomes too obviously burdensome progressives lean
towards borrowing money to keep above water the drowning body of a debt-prone
government. We’ve all heard the expression “drowning in debt,” usually applied
to poor people. But states may also be
impoverished through excessive spending.
Borrowing, a politically cheap form of increasing taxes,
also ratifies the progressive principle that spending must always increase. Ideally,
state debt must remain invisible, and borrowing is a governmental cloak of
invisibility to anyone but the professional progressive politician who has learned
to fool, in Abe Lincoln’s memorable phrase, “some of the people all of the
time.”
Slowly, painfully, some of those in Connecticut who have
been fooled all the time are beginning to understand that there is no budget
surplus in Connecticut.
A state surplus is money acquired through excessive taxation
when the state’s debt is net zero. Connecticut’s state debt, continuing by
leaps and bounds, was about $25.7 billion in 2024, according to state Treasurer
Erick Russell. According to CTMirror’s Keith Phanuff, “Surging income and business
tax receipts will leave Connecticut with its second-largest surplus in state
history, analysts reported Wednesday, even as officials remained divided
whether to use any of the $2.3 billion windfall to mitigate big cuts in federal
aid.”
So then, $25.7 billion minus $2.3 billion leaves us with a
debt of $23.4 billion. Repeat: There is no surplus, and the notion that the predictable
consequences of indebtedness may perpetually be passed along to children yet
unborn is the equivalent of political fool’s gold sold by the ton to a
credulous media.
According to Truth in Accounting’s Financial State of the States 2024
report, “Connecticut has the dubious distinction of placing last [among 50
states] in our 2023 report. Taxpayers are on the hook for $44,300 each for FY
2023. The total needed from taxpayers [nationally] was $64.9 billion.
Connecticut remains in debt in spite of an improvement in its financial
condition over last year. The state experienced an increase in revenues over
expenses, and a decrease in pension liabilities. However, it moved to last
place in TIA’s ranking because New Jersey’s calculated financial position
improved. The state must do more to cut its Taxpayer Burden for long-term
fiscal health. It remained an “F” state for 2023.”
Everyone in Connecticut is pinched, including state businesses.
In its annual Survey of Connecticut Businesses 2025,
the Connecticut Business and Industry Association (CBIA) outlines what might be
called a state of the state summary of Connecticut’s economic challenges and
business sentiment.
The survey collects input from over 2,800 executives across
various Connecticut industries, and its bullet points are a series of coffin
nails.
The Hartford Courant reports on the
survey’s findings:
“♦More than nine in 10
businesses say the cost of doing business is rising, driven by labor,
healthcare, energy, taxes, and compliance costs [the costs incurred through
legislative regulations].
“♦76%
of employers report difficulty hiring and retaining workers, with skills gaps
and wage expectations as top barriers.
“♦59%
say access to affordable, quality child care is important for attracting and
retaining employees.
“♦Only
12% believe the state’s business climate is improving, while 47% say it’s
static, and 40% believe it’s declining.
“♦Two-thirds
of businesses turned a profit in 2024, 18% broke even, and 15% reported losses
— seven points higher than forecasted.’’
“For Connecticut to realize its economic potential, the
state must address its high costs with policies that convert its strengths into
sustained economic momentum,” Chris DiPentima said. DiPentima
is “the president and CEO of CBIA, Connecticut’s leading business organization,
with thousands of member companies, small and large, representing a diverse
range of industries from every part of the state.”
The keyword here is “policies.” For the past four decades, it has
been the overriding policy of dominant Democrat legislators in the state’s General
Assembly to increase state deficit spending and loftily ignore the consequences
outlined in the CBIA’s successive reports, while hiding in recent years behind
fictional state “surpluses.”
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