Folks are starting to track the effects of taxpayer flight in Connecticut, now, too. Here’s Red Jahncke in Investors Business Daily:
The higher earners are departing. Connecticut is the only state where the adjusted gross income of emigrants exceeds the AGI of remaining residents.
Between 2011 and 2013, about 95,000 taxpayers left the state. Their average AGI was $112,000, versus $101,000 for the remaining 1.4 million taxpayers. Only 78,000 taxpayers moved into the state, bringing an average AGI of only $86,000. Data are not yet available for 2014.
The outlook is dire. Connecticut’s budget is about $18 billion. Just four months into this fiscal year, it fell into a deficit, requiring a special legislative session to adopt $350 million in short-term fixes.
For various projects that I’ve undertaken for the RI Center for Freedom & Prosperity over the past few years, I’ve watched Connecticut’s trends out of the corner of my eye, and there was a conspicuous reversal of the state’s fortunes around 2009 or so. I’m sure people more familiar with policy debates in that state could come up with an explanation readily, but my sense is that the state government tried to borrow and spend its way out of the recession and fell off a cliff.
From the fourth quarter of 2009 to the second quarter of 2015, Connecticut’s state and local tax collections increased 76%, according to the U.S. Census, which was the 14th biggest increase in the country. Rhode Island is next on the list, still rounding to 76%, but we were already trailing the country in just about everything, anyway. So, whereas Rhode Island has only sunk a bit deeper into its problems, Connecticut has taken a tumble.
Public policy really does matter. Unfortunately, it’s extremely difficult to get people to think about it clearly and objectively.