At the Daily Signal last Friday, Fred Lucas described about what happened after Connecticut "introduced an income tax to balance its budget."
According to Lucas:
"In 1991, Connecticut Gov. Lowell Weicker decried the state’s “orgies of spending,” and said his income tax proposal—which would include fiscal discipline—would balance the books.
"Connecticut recently marked the 25th anniversary of the income tax, which has resulted in little to no spending restraint. State spending grew 71 percent faster than inflation from 1991 to 2014 and most of that went toward debt services payments and state employee benefits—which combined grew 174 percent over the rate of inflation, according to a report by the Yankee Institute for Public Policy, a Connecticut think tank. The tax has raised $126 billion in revenue for the state.
"Weicker, a one time Republican senator who won the 1990s governor’s race as an independent, was praised by the left and won the Profiles in Courage Award in 1992 from the John F. Kennedy Presidential Library and Museum.
"However, even Weicker publicly said the state didn’t remain in strong shape, but he blamed the state Legislature and his successors, former Gov. John G. Rowland and current Gov. Dan Malloy, for lack of fiscal discipline.
“After I became governor and we enacted the income tax, the state was in the black,” Weicker told WTNH of New Haven last month. “All of those who cursed me, including … the representatives, John Rowland, everybody went ahead and spent all the money … When Dan Malloy became governor, they kept on spending and then they were right back in the red, which is where we were back in 1990.”
He also points out:
"Connecticut’s income tax rate isn’t as high as some nearby states, such as Maine, New Jersey, New York, and Vermont, which have income tax rates of between 7 percent and 8.5 percent.
"Some of the higher taxes in nearby states is all Connecticut has going for it, said Curtis Dubay, research fellow for taxes and economic policy with The Heritage Foundation.
"The income tax has led to a big expansion [of] state government, it wasn’t used to pay for existing spending,” Dubay told The Daily Signal. “The bottom line is that it was the wrong decision for the state that is bleeding talent and companies. It’s leading Connecticut into a Detroit-style death spiral.”
"The Hartford Courant said, “Overall, Connecticut had the second-highest income tax per capita, at $2,161 from every man, woman and child, just $25 less per capita than New York.” The state’s largest newspaper editorialized, “the state is utterly dependent on the tax … In 1991-92, the state budget was $7.6 billion. This year, it’s $19.76 billion.”
Here are the six key points in the executive summary of the Yankee Institute -- Connecticut's free-market think tank -- report, "Where has all the Money Gone? The 25th Anniversary of Connecticut's Income Tax," which is the basis for Lucas' reporting:
- Since 1991, the state has taken in $126 billion through the income tax.
- The top income tax rate has risen steadily since 1991 – from 4.5 percent to 6.99 percent today.
- State government spending grew 71 percent faster than inflation between 1991 and 2014.
- In the first three years after the passage of the income tax, the fastest growing area of spending was welfare, which saw a 30 percent increase over those three years. During those same years, the number of people living in poverty in Connecticut grew from 6.8 percent to 10.8 percent, which is where it stands today.
- From 1991 to today, spending on debt service payments and public employee benefits grew faster than any other category of spending. This category, called “non-functional,” grew 174 percent over the rate of inflation. The next fastest growing category, corrections, grew by 103 percent.
- The constitutional spending cap, approved by 80 percent of voters in 1992, and passed in conjunction with the income tax, was never fully implemented by state lawmakers; as a result, according to an opinion issued last year by the state’s attorney general, it is not currently in force.
Information worth remembering the next time politicians make promises while raising taxes.