State of Connecticut Budgeting After the Great Recession

The state of the states has improved since the Great Recession, but for many states, revenue shortfalls persist and budget balancing is an ongoing challenge. Connecticut is among states with stagnant population growth and revenues that do not keep up with expenditures. Decades-old pension and post-retirement obligations are large burdens for the state. Although the fiscal picture of the state is well characterized in the press, popular story lines about Connecticut’s high corporate tax burdens and the economic burden of residents leaving the state do not hold up to evidence-based examination. The fiscal circumstances of the state’s FY2018–FY2019 biennium budget were anticipated because of good fiscal transparency, but the political reactions to them were not, creating an unexpectedly fraught and protracted budget standoff that continued months beyond the start of the biennium. The story of these circumstances and their resolution are the focus of this paper.