The proposed $55.7 billion biennial budget for Connecticut has sparked strong opposition, particularly from the Yankee Institute. The primary contention centers on the budget exceeding Connecticut’s constitutional spending cap by $215 million and reflecting a spending increase of over 5%. Critics argue that this indicates a shift back to a tax-and-spend approach. The budget is seen as undermining fiscal policies established in 2017 designed to stabilize the state’s finances by creating significant new expenditures without tackling existing waste.
Yankee Institute President Carol Platt Liebau criticizes the budget as displaying flawed fiscal management. According to her, it endangers the moderate gains in pension funding and credit improvements, warning that this path may lead to higher taxes and deeper debt. There is also the risk of affluent residents leaving the state, resulting in a reduced tax base.
In addition, the budget proposes a four-year capital gains surcharge targeting wealthy residents, which opponents claim may drive these individuals to relocate to states with more favorable tax environments. This measure is perceived as a temporary fix that ignores underlying spending inefficiencies. Governor Ned Lamont also voices concerns about sustainability, emphasizing the potential consequences of relying on such spending levels.
The ongoing debate marks a clear division between advocates for increased investment in public services and those who stress financial prudence, sparking broader discussions on the state’s fiscal priorities and long-term economic health.
