As Connecticut faces an historic state budget deficit,this report suggests that the state faces a budget crisis caused by a declining economy and short-sighted fiscal choices, rather than a problem of overspending. This analysis of Connecticut revenues and spending finds that Connecticut’s state and local government is relatively lean compared to other states and that state spending has remained fairly stable over recent decades.
Among the findings of the study:
- 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 5th 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% in 1997 down to 13.9% in 2008. Connecticut’s decline occurred over a period that the 50-state average increased from 15.6% to 15.9%.
- 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% of taxpayers pay less than half the share of their income on state and local taxes (4.9%) that middle-income (10%) and lower-income (12%) taxpayers pay.
