Connecticut Is Circling The Drain Financially

it`s no coincidence that it`s the democrat controlled states that going down the crapper financially.

originally posted by: hopenotfeariswhatweneed
a reply to: ketsuko


So if this does happen, what happens to all those peoples retirement funds, do they just say bad luck moneys gone suck it up ?

perhaps but then who is the state going to hire?

no educated career minded person will ever again accept a state job, the state will have to hire McDonalds cast aways,and no state will survive with employees who were rejected by McDonalds.

a reply to: Tardacus

The state is going to have to hire under less generous terms.

They might have to hire and fire like the rest of the private sector. It's very, very rare these days that you find a company offering a pension, for example, but for some reason, government and union jobs all insist on one. And you can see the results, companies who deal with union pulled under and cities and states with enormous unfunded retirement obligations being pulled under now too because you can only tax so much out of the Golden Goose before you kill her.

Connecticut has some very wealthy residents as a lot of Wall Street big shots live there. However, the state has been taxing the bejeezus out of them. As we've been trying to tell progressives, capital is fluid. It will eventually move to where there is less taxes/confiscation.

A lot of the financial wealth has been moving to Florida from Connecticut where there is no income tax. Technology has made trading and other financial service a lot of less dependent on location. A ton of hedge funds, private equity groups, asset management firms, etc are getting the F'k out of Connecticut.

Here is a good article/analysis on the situation. Top earners leaving Connecticut

Connecticut faces an outmigration trend in which higher-earning individuals are leaving the state, with Florida being one of the primary beneficiaries. According to IRS data, from 2011 to 2012 4,560 Connecticut residents moved to Florida, taking with them $1.3 billion in income, an average of $285,000 per person. Florida, with no income tax, has been attracting wealthier individuals as Connecticut passed two of its largest tax increases in history in 2011 and 2015. Notably, Florida has siphoned off some of Connecticut’s wealthiest people. In 2015, hedge fund manager Paul Tudor Jones moved from Greenwich to Florida, taking with him nearly $30 million in income tax revenue

You cannot tax your way to prosperity...

Maybe they should start polling Connecticut residents, asking if they'd rather be absorbed into Massachusetts or Rhode Island.

I live here. I'd rather be part of ANY OTHER STATE.

I get very little benefits for extremely high taxes. This place sucks. As soon as my kids graduate, I'm out.

originally posted by: ketsuko
This is just part and parcel with the threads about paying public officials in Illinois.

But despite all its wealth, Connecticut is almost in worse fiscal shape than Puerto Rico. Let that one sink in for a minute.

A state that ranks as one of the wealthiest in the nation ... is in worse fiscal shape than Puerto Rico. Why? It is nearly $75B in debt. For a state the size of Connecticut, that's a lot!

That's just the overall state. Look internally. It gets worse.

They can't pass a budget.

Lawmakers, who have been bickering with Gov. Dannel Malloy for months over how to clean this mess up, missed a July 1 deadline to pass the state’s $40 billion budget. There are currently four different proposals circulating, and Malloy predicted there won’t be an agreement until September or October.

At that point, the state will likely be operating with a deficit that could climb to $5 billion over the next two years.

Not one that won't run up way more in new debt anyhow.

Hartford is contemplating bankruptcy, and the four major cities, including Hartford, owe a combined total of $4.8B in retirement benefits payouts.

But with no budget in sight, Hartford, a microcosm of the state’s troubles, is contemplating bankruptcy. The state’s four major cities, Hartford, Waterbury, New Haven, and Bridgeport, have accumulated a combined $4.8 billion in retirement benefit obligations and may need future intervention from the state to handle its debts.

And how is the state going to handle bailing them out when the state itself may need bailing out?

And why is this? It's the same old story. Politicians can't be wise with the money.

“A lot of what is going on now could have been predicted 30 years ago,” said state Comptroller Kevin Lembo. “Revenue was flowing into state coffers but politicians never did the hard work to make sure the retirement system was funded. They did the opposite and had them underfunded.”

For 80 years the state failed to properly save for the cost of pensions promised to its public employees and teachers. Its spendthrift decisions led then-Gov. Lowell Weicker to enact a state income tax in 1991.

Soon buckets of revenues from the new tax and from the state’s passage of legalized casino gambling began to flow into state coffers. State’s leaders went on a spending spree.

And the results, while predictable, were inevitable because you can't bilk math. Numbers do what they'll do, and when you don't pay attention and kick the can down the road betting someone else will have to deal with your mess, the mess eventually comes home in a big way. Now as rich as Connecticut is, they can't handle the mess.

The Daily Beast article somewhat plays it down, but the chief driving factor for this unfolding disaster is the public employees’ guaranteed pension and benefits funds. The same as we’ve seen in Chicago and other major cities, promises were made during times of high employment and revenue with no foresight as to what the long term costs would be when all of those public servants aged out of the workforce and continued to live on for decades, being augmented by ever larger armies of workers. As is the case with government at every level, the unions negotiated sweet deals with nobody putting any thought into arguing on behalf of the taxpayer from the other side of the table. Now the bill has come due and even in a state as prosperous as Connecticut has been, the revenue stream is never enough to feed the beast.

So let's see how many dominoes are getting ready to fall ... Illinois, Connecticut, California ... and what about the cities? How many of them are just about ready to call it quits on their debt too? We've already watched it happen in Michigan with the Detroit area.

and replacing capitalist democrats with capitalist republicans fixes it how exactly?

originally posted by: ketsuko
a reply to: starwarsisreal

Unless these little catastrophes are strung out, I'd say it's going to get uglier before it gets better especially if Washington tries to bail them out.

Granted these are states and not cities, but Washington refused to bail out Detroit.

originally posted by: DontTreadOnMe
Granted these are states and not cities, but Washington refused to bail out Detroit.

Along the same lines, I have to laugh at how Puerto Rico's governor thinks that statehood would somehow solve his problems.

Uh, dude: States cannot file for bankruptcy. No such mechanism exists. Congress would have amend the bankruptcy laws to provide for this, and they could provide for territories just as easily as they could for states.

A huge part of it is city contracts. They pay ridiculous prices. Somewhere in southern ontario there's a park that the citizens wanted stairs built in and the city said it will cost up to 150000$ for a damn staircase! Some guy built them for 500$ and the city took them down. They're stupid with money

originally posted by: andrew778
A huge part of it is city contracts. They pay ridiculous prices. Somewhere in southern ontario there's a park that the citizens wanted stairs built in and the city said it will cost up to 150000$ for a damn staircase! Some guy built them for 500$ and the city took them down. They're stupid with money

Of course they're stupid with money. It's not theirs, and because they right laws, they think they can simply create more taxes and fees to cover whatever they want to do. So someone's brother's uncle owns a little firm that needs a fat contract ...