On March 24, the Finance, Revenue and Bonding Committee held a public hearing on a bill (S.B. 1528) that orders state officials to review Connecticut’s tax code and compare it to neighboring states. It’s being presented as a study to improve competitiveness — but the activists lining up behind it clearly have something more nefarious in mind.
One of those activists was AFL-CIO President Ed Hawthorne, who submitted testimony urging lawmakers to enact a “robust revenue package” that includes a capital gains surcharge, a new personal income tax bracket for millionaires, a property tax on homes over $3 million, and a digital ad tax. He also criticized the state’s commitment to budget discipline, accusing lawmakers of prioritizing “fidelity to the so-called fiscal guardrails over investing in generations of students, caregivers, seniors, and other vulnerable populations.”
“The status quo is not sustainable,” he warned, insisting that lawmakers create “a truly progressive revenue structure with fiscal roadblock reform, not minor tweaks or gimmicks that just dull the pain.”
However, during the hearing, Sen. Fazio took issue with Hawthorne over the real-world consequences of the high-tax model progressives like the AFL-CIO are trying to bring to Connecticut.
“Altogether, those three states have lost over 1.2 million people just since 2020–2021 with those high taxes and with those tax increases,” Sen. Fazio said. “Touting probably the worst examples of economic failure in the state… probably makes most legislators less likely to support them.”
When Hawthorne suggested California was a success because of its high GDP, Sen. Fazio reminded the union leader that “California has the highest supplemental poverty rate in the country,” adding, “Connecticut has had among the five highest tax burdens in the country for many years… and we have seen very little income growth for the middle class. We have seen insufficient job growth… under a regime where we have very high taxes.”
Still, the AFL-CIO wasn’t alone in calling for an end to fiscal discipline. SEIU, CSU-AAUP, and Working Families Party all echoed the same mantra: raise taxes and eliminate fiscal constraints to fund “transformative investments.”
Yet, what’s lost on these groups are the considerable strides Connecticut has made toward fiscal responsibility because of the ‘fiscal guardrails.’ Worse, these are the same forces that helped create the fiscal mess that made the state’s guardrails and higher taxation necessary in the first place.
For years, public-sector unions cut backroom deals that gutted basic funding requirements and left the state buried in debt.
Back in 1971, a law was passed requiring full funding of pension obligations by 1985 — mandating that Connecticut pay the full Annual Required Contribution (ARC) toward both current costs and unfunded liabilities. But that mandate was later tossed aside through union deals that put politics over prudence.
State law allows collective bargaining agreements to supersede state statute, which is how the 1992 and 1997 the State Employee Bargaining Agent Coalition (SEBAC) agreements were able to override this full-funding requirement. These agreements have allowed the state to contribute less than the ARC, delay payoff periods, and change amortization methods — decisions that contributed to the pension crisis and set the state on a course toward mounting debt and budget shortfalls.
Raise Their Taxes, Lose Their Forwarding Addresses
According to a recent report by the Heritage Foundation, nearly 1.2 million residents moved out of California to another state than moved to California between April 2020 and July 2023 — despite having what AFL-CIO’s Hawthorne called “the most amazing weather and geography in the entire country.”
New York lost more than 882,000 people during the same period. And these weren’t just any residents — they took billions of dollars in taxable income with them.
This trend isn’t limited to California and New York. New Jersey’s millionaire’s tax didn’t stop the Garden State from losing high earners either. Though early research found only modest migration, newer trends show New Jersey is now hemorrhaging wealth to states like Florida and Pennsylvania.
The evidence isn’t anecdotal anymore — it’s a nationwide pattern. According to the Heritage Foundation, “About 2.8 million more Americans moved out of high-tax states than moved to high-tax states between April 2020 and July 2023.” The migration wasn’t limited to CEOs and tech moguls: “This pattern is true of all income groups, though this pattern is especially true of those making $200,000 or more annually.”
In fact, between 2020 and 2023, “The 10 states that have the highest taxes as a share of state GDP… lost 2.3 million residents,” while the 10 lowest-taxed states gained over 2.1 million. High-income individuals, the very people targeted by Connecticut’s proposed capital gains surcharge and mansion tax, are by far the most mobile: “There are nearly 60 people making $200,000 or more who move out of high-tax states for every 40 who move in.”
These aren’t people looking to dodge minor inconveniences. They’re voting with their feet — despite the high costs of relocation. As Heritage notes, “Moving across state lines comes at a significant cost… [but] nearly 1.2 million more Americans moved out of California to another state than moved to California between April 2020 and July 2023.”
And what about Connecticut? Since implementing the income tax in 1991, the state has raised taxes repeatedly — on income, capital gains, and corporations. What has it gotten in return? Stagnant job growth, minimal income gains for the middle class, and a steady trickle of wealth and population heading for the exits.
While S.B. 1528 is billed as a tax study, the testimonies it attracted indicate that activists view it as a vehicle for a sweeping tax overhaul — and a chance to dismantle the state’s bipartisan fiscal guardrails in the process.
That push is being led, unsurprisingly, by public-sector unions. But unions need to stay in their lane. Representing their members is their job — not rewriting the state’s tax code. They were never elected by voters to shape fiscal policy, and they’ve already done enough damage behind closed doors.
For decades, public-sector unions negotiated deals that gutted pension funding requirements and drove Connecticut’s finances into the ground. Now those same unions want lawmakers to hand them the keys to tax policy, all under the banner of “fiscal justice.” But there’s nothing just about chasing away taxpayers, hollowing out the middle class, or saddling future generations with more debt.
The truth is simple: Connecticut’s fiscal mess was created because of union influence — not in spite of it. The idea that these same groups should now be trusted to design the state’s tax code is as reckless as it is absurd.
Connecticut doesn’t need to become a carbon copy of California or New York. It needs to double down on fiscal responsibility, preserve its guardrails, and resist the pressure to raise taxes on families and job creators.
“Don’t California my Connecticut,” Sen. Fazio warned. “We’re already in bad enough shape already.”
Take Action! Protect the Guardrails
Big Labor is pressuring lawmakers and Governor Lamont to declare a “fiscal emergency — not because there’s a real crisis, but so they can pause Connecticut’s fiscal guardrails and ramp up spending.
There’s no clear budget shortfall. No plan to cut spending. Just political pressure to drain the Rainy Day Fund and override the rules that protect taxpayers.
Governor Lamont is holding firm — for now. But without strong public support, that could change.
👉Click here to tell lawmakers: Back the Governor & protect the Guardrails.
