Yankee Institute expressed strong opposition to the proposed $55.7 billion biennial budget, which ignores Connecticut’s constitutional spending cap, and paves the way for dismantling crucial fiscal protections and increasing taxes.
Although Connecticut lawmakers are preemptively claiming our state will suffer a “fiscal emergency” resulting from federal funding cuts that are still unknown, they have drafted — and the Appropriations Committee has passed — a budget stuffed with new spending, and without any apparent effort to curb wasteful or unnecessary expenditures. The proposed budget exceeds the spending cap by $215 million; ramps up spending by more than 5%; and proposes $388 million in new funding for public colleges and universities, even though these institutions already hold hundreds of millions in budget reserves.
“This budget reveals the truth: Too many Connecticut politicians think the answer to every problem is ultimately found in the taxpayer’s pocket,” said Yankee Institute President Carol Platt Liebau. “For weeks, lawmakers have claimed that massive federal cuts are looming, using fear as a tool to justify breaking Connecticut’s bipartisan fiscal guardrails. Yet they’ve made no effort to reduce state spending, and instead proposed a budget that blows past our spending cap.”
She added, “This is not sound fiscal management — it’s an attempt to turbo-charge a massive spending spree. This isn’t how Connecticut’s families manage their finances, and it isn’t how our government should do it, either.”
Liebau also criticized policymakers for proposing to bust and/or alter the fiscal guardrails, the bipartisan reforms enacted in 2017 as the state’s people endured a budgetary crisis marked by a series of significant tax increases. Since then, the guardrails have stabilized Connecticut’s financial outlook by reversing decades of pension underfunding, improving the state’s creditworthiness, and saving the state more than $170 million annually in reduced pension debt payments.
Busting the guardrails now, just as the state has made moderate progress, would be a serious mistake, Liebau said.
“Appropriations Chair Rep. Toni Walker declared, ‘Government cannot fail. It cannot stop,’” Liebau noted. “When families or businesses overspend, they go bankrupt. When government overspends, it just takes more from you — the taxpayer — without better results to show for it. And the result is always the same: higher taxes, deeper debt, and more families driven out of Connecticut, shrinking the very tax base we rely on.”
In the Democratic revenue package passed out of committee on April 23, Liebau singled out a four-year capital gains surcharge on Connecticut’s wealthiest residents for special criticism. “It’s the same tired playbook,” she said. “Spend beyond our means, then use the politics of envy to slap new taxes on people who are already overtaxed.”
“This ‘temporary’ tax is just more of the same,” she said. “Rather than trim bloated spending, they target our most affluent residents — people who can easily pack up and move to places like Florida or Texas. And when they leave, we lose even more revenue. They don’t need Connecticut. But our state desperately needs them.”
She continued, “Connecticut already gives taxpayers some of the worst returns on investment in the nation. Raising taxes again won’t fix that. This cycle of overspending and overtaxing has never worked — and it never will.”
Gov. Ned Lamont also has raised concerns, particularly about exceeding the spending cap, cautioning that parts of the $55.7 billion budget “may not be sustainable and could unfortunately result in cuts or tax increases under future state leaders.”
“Gov. Lamont is right to question whether this level of spending is sustainable,” Liebau said. “He recognizes that unsustainable budgets today mean painful tax hikes or cuts to vital programs tomorrow. We urge him to hold the line.”
She added, “Our beautiful state is known as the Land of Steady Habits. But Hartford’s only steady habit is reckless spending followed by demands for more from taxpayers. Our people deserve better. It’s time to break that cycle — before it breaks Connecticut.”
