Blue-State Fools
Connecticut tries to export its fiscal failure
IN his role as co-chair of the Democratic Platform Committee, Connecticut Gov. Dannel P. Malloy helped draft a platform he called an “extremely progressive document.”
No kidding. But what he didn’t say is that it’s a platform featuring misguided policies that have helped take a sledgehammer to his own state’s fiscal health.
Among the policies that made it into the platform are a higher minimum wage, expanded paid sick leave and higher taxes on millionaires — all policies Malloy has pursued as governor. If you want to see what “extremely progressive” policies will do to the country, witness what they’ve done to Connecticut.
The state’s tax base is crumbling. Its population is shrinking — Connecticut had a net loss of 44,000 people and $5 billion in taxable income between 2011 and 2014. Business starts are down, and move-outs are up.
GE made news in early 2016 when leadership announced the company’s Fairfield, Conn., headquarters would move to Boston. The next big business quietly threatening to leave is Aetna — which, given Connecticut’s reputation as a hub for the insurance industry, would be a much heavier blow to the state’s economy and self-image than GE’s exit.
Nestled between tax-happy New York and Massachusetts, Connecticut used to serve as a relatively safe haven for people and businesses. But over the past five years, Malloy and progressive state lawmakers have eliminated any semblance of an advantage the state had over its neighbors.
While many states have cut spending to deal with declining revenues brought on by the recession, Malloy and the Democratcontrolled state legislature chose to follow the tax, spend and regulate progressive playbook — and became the toast of the left.
The Daily Beast touted him in 2014 as the “progressives’ dream governor.” Connecticut’s new executive traveled the country proclaiming that Democratic candidates and lawmakers should follow his lead.
Since Malloy’s election in 2010, Connecticut residents have been hit with two significant tax hikes. Malloy also added regulations on businesses.
He championed the first mandated statewide paid sick leave in the country, forcing businesses with as few as 50 employees to offer up to 40 hours of paid leave to each employee. Connecticut then became the first state in the nation to raise its minimum wage to $10.10 an hour.
But predictably, Malloy’s shine has faded — and so has the gleam of his progressive policies. This year, his state faced a billiondollar budget gap. His progressive contemporaries in the legislature wanted another tax increase to plug the hole.
But Malloy responded in an unexpected way — by admitting the failure of his playbook.
“I’ve raised taxes multiple times. It’s not working,” Malloy told a Hartford town hall in March. “And it’s come up a cropper.” Translation: It failed miserably. Malloy was right. Even after $4 billion in tax increases, and this year’s $1 billion in spending cuts, Connecticut still has billion-dollar deficits forecast for the next two years. And then the forecasts get worse.
It’s the same sad story that has followed the progressive playbook the country over.
Like Connecticut, Illinois has pursued revenue over reform, seeking to squeeze taxpayers instead of cutting spending. Illinois enacted a historic income-tax hike from 2011 through 2014, collecting an additional $32 billion for the state’s coffers in an attempt to pay down pension debt and unpaid bills.
Despite this massive influx of cash, however, the state still has the nation’s worst pension crisis, at $111 billion in unfunded liabilities, and nearly $8 billion in unpaid bills as of July 2016.
Like Connecticut, San Francisco enacted mandatory paid sick leave. In fact, the city was the first in the country to do so, in 2007. Onethird of workers suffered layoffs or reduced hours, bonuses, raises and benefits after the city enacted its mandate, according to a 2011 citywide survey from the Institute for Women’s Policy Research.
Like Connecticut, Seattle’s government phased in an increased minimum wage beginning in April 2015, triggering the largest increase in unemployment since the Great Recession ended.
Malloy chose to pursue well-intentioned policies, to the peril of the people who elected him. His state’s ensuing collapse was far from unpredictable — it’s the inevitable outcome progressive beacons across the country have experienced firsthand.
Yet now Malloy, by co-chairing the DNC Platform Committee that endorsed these failed policies, is enabling other progressive lawmakers to impose these failed fiscal policies on the whole country. It appears Malloy hasn’t, after all, learned a thing.