Yes, we are number one. Connecticut residents work longer to cover their tax burden for the entire year than residents of any other state nationally, per a nonprofit organization called the Tax Foundation. This distinction is in large measure why Nutmeggers fly south in great numbers: Lower income taxes. Lower housing costs. Lower state and local taxes.
Confirming this fact is a 2009 study from the Yankee Institute for Public Policy, a Connecticut based, fiscal think tank.
Connecticut lost an estimated 325,526 residents between 1991 and 2008, according to study. Where do they move? States that benefit most from migrating Nutmeggers are Virginia, North Carolina, South Carolina, Georgia, and Florida. What is common about these states? Well, just refer back to my first paragraph. The state that most Nutmeggers pack their bags for is Florida, which has no income or inheritance tax.
Why is this bad? Yankee’s projections show that net income leaving Connecticut between 1995 and 2006 was around $5 billion (that’s $566,520,000 in lost tax revenue for our state and towns).
Of course, warmer weather is a major factor, and that is true, but there is nothing our legislative leaders can do to warm up Connecticut. Our cost of living, however, is something they can change. And change is needed. Too many Connecticut families are moving south and that’s hurting our state.
The claim that lowering the tax burden would hurt state services and public schools just isn’t so. A 2009 Wall Street Journal opinion piece by Stephen Moore and Arthur Laffer illustrates just the opposite:
“…The Live Free or Die State [New Hampshire] has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation -- even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York.”
No income or sales tax in New Hampshire -- impressive. At the minimum, Connecticut’s majority party should have considered just lowering both -- not raising the sales tax and other fees.
Adding more parity between the parties in our state legislature in 2012 will help. Simply put, divided government works better (at the state and national level). There is a greater possibility for fiscal responsibility when both parties are forced to consider each other’s positions on the issues – rather than the majority simply ignoring the minority. If Connecticut possessed more legislative parity between Democrats and Republicans, cost of living issues would likely take on a greater priority regardless of who controls the governor’s office.
At the national level, history provides two examples of long-term fiscal restraint during diverse party control: the most recent occurred under Democratic President Bill Clinton working with a Republican-controlled (but not dominated) Congress in the 1990s and the other under Republican President Dwight Eisenhower working with a Democratic-controlled (again, not dominated) Congress in the 1950s.
Another point worth noting is that good public policy can potentially last longer when supported by both parties. The Reagan Administration’s 1981 and 1986 tax laws were passed by a Democratic-controlled House of Representatives and -- impressively -- these laws have largely endured through today.
So, here’s how to keep people from moving south. Add more legislative parity in the state house this November to create a sharper focus on reducing Connecticut’s income tax and overall state taxes (reducing small business regulations to create jobs will help too). We can’t bring warmer weather to Connecticut - and that’s okay, I enjoy our change of seasons -- but we can certainly work to make Connecticut an attractive option to live in through our golden years.
Chris DeSanctis is an Adjunct Professor in the Department of Government and Politics at in Fairfield, CT. He can be reached at firstname.lastname@example.org.