The Nutmeg State is going to be hit hard this year, as forecasts show that the state will be $400 million short after wrapping income tax collections for this fiscal year. It will be the first time income tax collections have dropped since the recession, but it’s really not that surprising. Democrat Governor Dannel Malloy has been relying on tax hikes and taking the richest people in the state for all that they’ve got to give in order to make ends meet.
Something had to give–after all, the top 100 earners in Connecticut are responsible for paying the majority of the state’s taxes.
At the end of 2016, it was reported that some 30,000 people had reportedly left the state that year and in 2014, a staggering 96,000 Nutmeggers abandoned ship. People have been leaving CT en mass for several years now, and the exodus shows no signs of slowing down. In addition to its dwindling population, some of the state’s largest private employers, like General Electric and Bristol Myers Squibb, have already left.
It comes as no surprise then, that the state is literally running out of people to collect taxes from.
As reported in 2016, “According to an analysis by The Yankee Institute for Public Policy, Connecticut’s outmigration causes the state to lose $60 of income every single second.”
The blatant reliance on the wealthy to cover the state’s expenses is clearly not going to work anymore – and even Malloy seems to know that. Nearly half of the “shortage” the state is expected to experience this year comes from a drop in receipts from the state’s top 100 earners. Perhaps they, like so many others, have moved on to less costly pastures.