Good day all. Connecticut is one of the bluest of Blue states. It has a population of very rich moonbats, and is home to a number of major financial institutions. Basically the state should be awash in a sea of cash.
However, that really isn’t the case. Long story short, Connecticut, like pretty much every Progressive Democrat run state, is on the verge of financial ruin due to out of control spending. Here are some of the details from Reuters:
Connecticut, home to hedge fund billionaires alongside cities mired in poverty, is racing against the clock to pass a budget or face further spending cuts to education and municipal aid across the state. Nearly two months without a budget, Connecticut is getting crushed by a burdensome debt load that has squeezed spending and amplified legislative discord.
State lawmakers must agree on a biennial budget soon or else Governor Dannel Malloy’s executive order to slash state aid to municipalities and eliminate school funding for some districts will go into effect in October. The state faces a $3.5 billion deficit over the next two years.
But, how is this possible? The state is filled with rich Democrats who love big government and massive spending on feel good projects. How can they be on the cusp of financial ruin?
Among the wealthiest in the United States, Connecticut has been strained by already high taxes, outmigration, falling revenues and $50 billion of unfunded pension liabilities.
Outmigration? Oh! I know what they mean. They mean emigration. Basically, people are fleeing the state because the tax fattened hyenas in the state legislature, along with one Proglodyte moonbat governor after another, have raped the taxpayers one to many times.
State lawmakers must agree on a biennial budget soon or else Governor Dannel Malloy’s executive order to slash state aid to municipalities and eliminate school funding for some districts will go into effect in October. The state faces a $3.5 billion deficit over the next two years.
So the Proglodytes have, like every other Democrat run city and state, promised their union masters huge pensions, but forgot to actually put any money into them. Connecticut has also been borrowing money and now those loans are coming due, with interest.
Some $23 billion of outstanding municipal debt has also constrained spending. Bondholders must be paid ahead of most other expenses like non-essential services and payments to vendors.
Oh that will make the vendors happy. If they don’t get paid, they might just refuse any further services to the state. I’m assuming that many of these vendors do things like plow snow in the winter. We have a bad winter and the snow plow operators refuse to work? Fun times!
The $2.85 billion of principal and interest the state paid on its bonds in fiscal 2017 was the highest in six years, according to preliminary unaudited information from State Treasurer Denise Nappier’s office that has not yet been published.
“The state invested in the wrong things for a period of time. It allowed its higher educational institutions to suffer while it sought to placate communities with respect to other forms of local reimbursement,” Malloy told Reuters during an interview in his office on Thursday.
Nice doublespeak there. So what did they blow their money on?
“We built too many prisons, which we’re still paying off even while we’re closing them,” he said.
Let me guess? You expected to fill those prisons with gun owners, Trump supporters and small conservative business owners, right? You certainly weren’t planning on putting actual criminals in them. Since a lot of those potential targets fled the state, yeah I can see how you overestimated the need.
Further, the state’s budget crunch is threatening its cities including the state capital of Hartford, which is considering bankruptcy due, in part, to its dependence on state aid.
The cities, like the state, have been run, (Right into the ground), by good Progressive Democrat Mayors, most of whom have trouble balancing their own checkbooks. Meanwhile, what about all those nice fat pensions the bureaucrats are expecting?
Connecticut has piled on debt to bolster its public pensions, selling $2.3 billion of bonds in April 2008. And again in December 2009, the state sold $916 million of economic recovery notes to close a budget deficit after depleting its rainy day fund during the Great Recession.
It has never occurred to the morons ruining running the state that perhaps, it might not be the best idea to borrow money to pay off the unions. Since the Democrats are generally nothing more than servants of the public sector unions, telling the unions that it might be time to rethink things would never occur to them.
By many measures, Connecticut’s debt levels are the worst of the 50 U.S. states.
That’s saying something, considering the finances of California and Illinois.
It has the most net tax-supported state debt per capita in the nation at $6,505, versus a median of $1,006, according to Moody’s Investors Service.
No problem! Just tax the rich! Isn’t that the usual way Proglodytes raise funds? What’s stopping them? Well, according to a story that came out last May, The Rich are tired of being soaked.
The wealthiest state in the U.S. is having trouble collecting enough money to pay its bills, and the Democratic governor doesn’t think taxing the rich is the answer anymore.
After two decades of robust growth, Connecticut forecasts it will come in $400 million short in income-tax collections this fiscal year, worsening a budget crisis that has prompted all three major ratings firms recently to downgrade the state’s credit rating. Connecticut’s budget office estimates that income-tax collections will fall in fiscal 2017 for the first time since the recession.
Gov. Dannel Malloy has twice before bet that taxing the wealthy would help solve the state’s fiscal problems. But neither increase resulted in sustained revenue growth, according to his administration, which says it would be a mistake to do it a third time.
“You can’t go back to that well again,” said Kevin Sullivan, commissioner of Connecticut’s Department of Revenue Services. “The idea that there is yet another significant amount, in terms of long-term stability, to get out of that portion of the population is just not true.”
Especially since that portion of the population can just pick up and leave, and a lot of them are doing so. You can’t tax people into oblivion if they aren’t around to be taxed in the first place.
Patrick Hayes, a Darien, Conn., resident who works in architectural interiors, says the state’s fiscal mess proves that raising taxes on the wealthy can’t solve Connecticut’s problems.
“We need a better plan,” said Mr. Hayes, 49, who noted he is among the group of top earners in the state. “Has this strategy failed previously? Then why we do we keep pursuing it?”
Obviously, Mr. Hayes isn’t familiar with the Standard operating procedures of Progressive legislatures. If the first round of tax hikes didn’t bring in as much as they thought, then raise them again until they do. Basically, this is the Proglodyte equivalent of “The beatings will stop once Morale has improved.”
To address the revenue shortfall, Gov. Malloy is seeking $700 million in concessions from public-sector unions and has threatened pink slips if unions won’t come to the table.
Oh good luck with that! Government Sector Unions agreeing to any cutbacks never happens. Instead, they usually demand Increases and more featherbedding.
Public-sector unions, however, maintain that the state’s wealthy should help solve the state’s fiscal problems.
State lawmakers should consider “asking Connecticut’s wealthiest taxpayers and largest corporations to sacrifice and pay a little more to protect the services that people rely on,” said Larry Dorman, a spokesman for Council 4, the state’s largest public-sector union.
How typical of the unions. They’ve driven a number of cities into bankruptcy with their incessant demands. Most of these have been in the People’s Democratic Republic of Kalifornistan, and unlike states, cities can declare themselves insolvent. When that happens, the first ones to get it in the neck or the greedy unions. All those sold gold pensions are generally the first thing to get cut.
States, on the other hand, really can’t go bankrupt. They actually have to set out to fix the problems. This requires that the state legislatures and governor actually knuckle down and do their jobs. Since 90% of their problems are due to their profligate spending, and raiding the treasury to buy votes, these are not the people to show courage and do the hard stuff.
Instead they will nibble around the edges, sweep things under the rug, (By using a Union janitor being paid $80 an hour), and generally pretending things aren’t that bad. But, as the late, great British Prime Minister, Margaret Thatcher once said: “The problem with socialism is that eventually you run out of other people’s money.” The Socialists in Connecticut are now learning that first hand.
Thatisall
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Don’t you just love the phrase, “non-essential services”? If it’s non-essential, then get rid of it. Don’t worry about how to pay for it. Step one towards your solvency. And provided free of charge. You’re welcome.
Gov. Malloy has twice before bet that taxing the wealthy would help solve the state’s fiscal problems. He never learned from all the multitude of other times it has been tried around the country. Slow learners these liberals.
And it’s the same problem in DC. The Congressional Budget Office uses static scoring to tell if a bill in Congress is a money raiser or money spender. Then they are Gomer Pile “surprise! surprise!” befuddled when it doesn’t turn out that way. Either it never occurred to them, or they know what it takes to get a bill scored the way they want, and they don’t give a hoot about the consequences. So really, most every member of Congress is either evil or stupid; or both.