Report recasts CT’s fiscal picture

Connecticut’s state government is relatively lean compared to other states and spending has remained fairly stable over recent decades, according to a new report published Friday that contradicts some of the recent debate about the state’s fiscal picture.

The report by the liberal-advocacy group Connecticut Voices for Children suggests that the state faces a budget crisis caused by a declining economy and short-sighted fiscal choices, rather than overspending. 

In its efforts to shape the fiscal debate, Connecticut Voices urges state policymakers to enact several revenue reforms to close the projected $3.6 billion budget deficit, including a progressive income tax, closing corporate tax loopholes, and scaling back on some of the state’s $5.3 billion in tax credits, exemptions, and deductions.

As Gov. Dannel Malloy prepares for his budget address Feb. 16, he has said the state must raise taxes and cut spending to deal with the deficit.

Among the findings of the study, which primarily analyzed data from the Census Bureau and the Bureau for Economic Analysis:

·         Connecticut’s state and local government has not grown as a share of the economy since 1970.  Connecticut’s state and local government is the 5^th smallest in the country, relative to the size of its economy.

·         State and local taxes and fees in Connecticut have declined as a share of the state’s total personal income since 1997. The proportion of total income paid towards state and local government in Connecticut has fallen from a high of 14.7 percent in 1997 down to 13.9 percent in 2008. 

·         As a proportion of total state income, Connecticut ranks among the bottom 10 states in its spending on education, social services, transportation, public safety, and environment and housing.

·         The wealthiest 1 percent of taxpayers pay less than half the share of their income on state and local taxes (4.9 percent) that middle-income (10 percent) and lower-income (12 percent) taxpayers pay.