A new study from George Mason University’s Mercatus Center finds that Connecticut ranks as the state in the worst fiscal condition – second only to Puerto Rico, which has amassed $70 billion in debt due to out-of-control government spending coupled with interference from Washington, D.C.
Connecticut – led by a Democrat legislature and governor and represented by an entirely Democrat congressional delegation – ranks as dead last among the states, owing largely to its massive debt obligations and unfunded liabilities.
According to Mercatus, Connecticut’s fiscal state is “poor across all categories,” which cover cash, budget, long-term, citizen service-level, and trust fund solvency.
The study finds:
On the basis of its fiscal solvency in five separate categories, Connecticut ranks 50th among the US states and Puerto Rico for its fiscal health. Connecticut’s fiscal position is poor across all categories. With between only 0.46 and 1.19 times the cash needed to cover short-term liabilities, Connecticut’s revenues matched only 94 percent of expenses, producing a deficit of $505 per capita. The state is heavily reliant on debt to finance its spending. With a negative net asset ratio of −0.88 and liabilities exceeding assets by 34 percent, per capita debt is $9,077. Total debt is $20.88 billion. Unfunded pensions are $83.31 billion on a guaranteed-to-be-paid basis, and other postemployment benefits (OPEB) are $19.53 billion. Total liabilities are equal to 53 percent of total state personal income.
Writing at the Yankee Institute for Public Policy Center in Connecticut, Suzanne Bates, director of policy and legislative outreach, says the Mercatus study shows how unprepared Connecticut is for its future, coming in second to Puerto Rico, “which is essentially bankrupt.”
“The Mercatus study shows that Connecticut is not prepared to weather a shock to its finances – whether the shock comes from a recession, another surge in outmigration, or from corporate inversion,” Bates writes. “Connecticut is unprepared because it is plagued by debt – both bonded debt and huge pension and retiree health care liabilities. It is one of only four states that do not have enough assets to cover their liabilities.”
“Connecticut has also almost completely depleted its rainy day fund, which is even more true after lawmakers chose to raid the fund to close the $260 million deficit for FY 2016, which will end June 30,” she adds.
Under Gov. Dannel Malloy (D-WFP), the state has seen massive tax increases and exits by swarms of businesses. In 2014, a Gallup poll found that about half of the residents of Connecticut polled said that, if given the chance, they would move out of the state.
In an op-ed in the Hartford Courant in August of 2015, prominent food writer Michael Stern wrote about his decision to leave the state for South Carolina:
For me, Connecticut is no longer the best place to be. Rather than feeling proud when I tell people where I live as I travel around the country, I am embarrassed. I am not going to whine about the all-too-obvious economic reasons for leaving, such as backbreaking taxes, moribund cities and gutted home values — all of which make Connecticut look like the next Detroit. What bothers me more is a matter of character…
Without effective opposition to the ruling party, we have become indistinguishable from the lockstep political correctness that defines any inexorably blue state.
Cases in point: Dannel Malloy, Richard Blumenthal, Chris Murphy. They all have been handily elected, so I grudgingly and sadly acknowledge that they are what voters want. For countless specific acts and statements during their tenures, they make me squirm to be their constituent; beyond what they’ve done and said is the matter of personality.
Last fall, according to a Quinnipiac University survey, Malloy’s approval rating had plummeted to 32%, the “lowest score for any governor in the nine states surveyed” in 2015.
The poll showed what the Hartford Courant referred to in October as “a stunning rebuke” of Malloy by Democrats, Republicans, and independents alike for raising taxes and mismanaging the state’s budget.
“Gov. Dannel Malloy’s job approval rating has plummeted to 32 percent, close to the historic 24 percent low hit by disgraced former Gov. John Rowland in January 2004, and Gov. Malloy is not in the middle of a corruption scandal,” said Quinnipiac University Poll Director Douglas Schwartz, Ph.D. “Malloy is getting hammered on the critical pocketbook issues, taxes, the budget and the economy and jobs.”
“Only 36 percent of voters are satisfied with the way things are going in the state, one of the lowest scores since Quinnipiac University started asking this question in 1997,” he added.
The poll found Connecticut voters sharply disapproving of Malloy, 58-32 percent, with 4-1 negative scores for his management of taxes and the state’s finances.
Only 58% of Democrats in the state approve of Malloy, while 86% of Republicans and 61% of independents disapprove. Men disapprove of the Governor at 62% and women at 55%.
A full 75% of Connecticut voters gave Malloy a “not so good” or “poor” rating on the state’s economy, with only 5% of voters finding Malloy’s policies have helped them.
Nevertheless, the White House honored Malloy with a seat in the First Lady’s box at President Barack Obama’s last State of the Union address in January, praising the flailing governor for his pursuit of “many of the progressive priorities that the President laid out to make America stronger.”
According to the White House, those invited to sit in the First Lady’s box “represent the progress we have made since the President first delivered this speech seven years ago – from the brink of a second Great Depression and two costly wars to an economy that is growing and renewed American leadership abroad.”
“The guests personify President Obama’s time in office and most importantly, they represent who we are as Americans: inclusive and compassionate, innovative and courageous,” the announcement from the White House said, continuing:
From his criminal justice reforms, including a “Second Chance Society” initiative that emphasizes successfully reintegrating individuals with nonviolent offenses into society, to common-sense gun safety laws following the shooting at Sandy Hook Elementary, Gov. Malloy has balanced important social reforms with strong economic priorities: Connecticut led America as the first state in the country to raise the minimum wage to $10.10 and pass legislation guaranteeing paid sick leave. Gov. Malloy also oversaw the successful implementation of the Affordable Care Act, driving down the state’s uninsured rate to historic lows and delivered the best job growth since the 1990s…
Following up in the Mercatus Center study from Connecticut in the ranking of states, Massachusetts, New Jersey, Illinois, and Kentucky are all found to be in poor fiscal condition. The states found to have the best financial status are Alaska – ranked as first – and followed by Nebraska, Wyoming, North Dakota, and South Dakota.