Connecticut's Democratic Governor Gives Up on Tax Increases

Burner said:

Tort lawyers have turned the ordinary risks of life, and minor mistakes into profit making opportunities for themselves.

We all have gotten notification of class action suites that are essentially nuisance suites that get resolved with everyone getting a couple of dollars or maybe a coupon and the lawyers walking away with millions.

The tort bar is deeply corrupt and exploitative.  

at the risk of rewarding the troll, I'll respond to this because it might be a convincing argument to other people.

there's a grain of truth in here.  For example, I just received a settlement in a Ticketmaster class action suit. I received a bunch of credits that I'm probably never going to use.  However -- what's the alternative?  Bar these kinds of class action suits and just let companies like Ticketmaster rip off consumers without penalty?  I'm in favor of these suits as a potential deterrent to predatory business practices.

DaveSchmidt said:

My contribution to the drift, before I read the report this weekend:

If you haven’t been involved in a personal injury case, you may not realize that the contingency fee covers only the lawyer’s hours. Plaintiffs pay for the other costs of their case — expert witnesses, depositions, tests on evidence, etc. — win or lose. And while the lawyer may carry some of those costs until a settlement or verdict, he probably needs at least some income from you along the way. It can get expensive, and is something of a built-in deterrent to us gold-diggers.

Actually, most personal injury lawyers eat the costs if there is no recovery.

Steve said:

Actually, most personal injury lawyers eat the costs if there is no recovery.

My family bore as much of the costs as we could afford during the year and a half our lawsuit was active, but maybe that was an anomaly. Regardless, it made us (along with our counsel) think hard about how solid our case was as we proceeded, contrary to some suggestions of a system run amok.

There is a lot more than a grain of truth. The system has been totally manipulated.  

https://www.forbes.com/sites/danielfisher/2013/12/11/with-consumer-class-actions-lawyers-are-mostly-paid-to-do-nothing/#430bee751472

ml1 said:

Burner said:

Tort lawyers have turned the ordinary risks of life, and minor mistakes into profit making opportunities for themselves.

We all have gotten notification of class action suites that are essentially nuisance suites that get resolved with everyone getting a couple of dollars or maybe a coupon and the lawyers walking away with millions.

The tort bar is deeply corrupt and exploitative.  

at the risk of rewarding the troll, I'll respond to this because it might be a convincing argument to other people.

there's a grain of truth in here.  For example, I just received a settlement in a Ticketmaster class action suit. I received a bunch of credits that I'm probably never going to use.  However -- what's the alternative?  Bar these kinds of class action suits and just let companies like Ticketmaster rip off consumers without penalty?  I'm in favor of these suits as a potential deterrent to predatory business practices.

Runner_Guy said:

Absolutely right.  It's from a think-tank with an ideology.  Read it with a grain of salt.

However, the report itself is extremely informative.  So far I have not found anything in it that I think is factually wrong nor polemical.

That report was some food for thought. A few dashes of NaCl from my shaker:

— The report notes that the personal income tax “has become, in both cases, increasingly reliant on high earners (Figure 7).” Figure 7 shows an increase in the share paid by high earners, from 2002 to 2014, of 87 percent for Connecticut and 55 percent in New Jersey. Striking. It doesn’t account, however, for the increase over the years in the number of taxpayers in that bracket; a separate article I found said, for instance, that the number of Connecticut filers earning $1 million or more rose 21 percent in just four of those 12 years, from 2011 to 2015. Also, inflation alone from 2002 to 2014 was 32 percent. To me, presenting Figure 7 without caveats like those is a sign of a writer who isn’t above getting cute with the data. Everything in the report may be factual — I’ll defer to you and your study of this subject — but I don’t like it when writers try to get cute with data.

— While Connecticut may be New Jersey’s closest peer if you’re looking for a control for your economic experiment, are they really similar enough to draw all of these conclusions? One big difference, it seems to me, is the reliance on agriculture. The Garden State’s net farm income last year: $180 million. The Nutmeg State’s: a loss of $4.5 million. Or tourism: According to each state, 10 percent of all jobs in New Jersey are tied in some way to the tourism industry, but only 5 percent in Connecticut. Yet the impact of personal income tax rates can be singled out when comparing economic growth and employment rates since the Great Recession?

— I also don’t like it when union health benefits are discussed as if they were a perk, rather than as collectively bargained compensation. (As I’ve noted before, I’m a longtime union member, though in the private sector.) When Eide imagines all the savings that could be gained by cutting state retirement health benefits, he doesn’t appear to acknowledge that benefits are part of the total package; if you want to cut them, workers are going to push for compensatory increases in other areas, like wages. It’s not as if health benefits are some add-on that’s just waiting to be plucked.

— Much is made of Malloy’s belief that Connecticut can’t go to the well to soak the rich anymore. That isn’t to say, however, that he wants to roll back the last several years of policy, a la Kansas. Which leaves room to argue, if you’re into this state comparison, that New Jersey, which didn’t go to its well so much, still has that option.

— Finally, to the heart of this part of the discussion. You’re better versed on the topic than I am, so I’ll ask: Which state’s pension funds are in better shape now? The one whose economy has grown faster but is falling far short in payments, or the one whose economy has grown more slowly but is making full, or nearly full, payments? (That sidesteps the question of whether either New Jersey or Connecticut is going to fix its problem, but to paraphrase a recent MOL comment, sometimes both sides in collective bargaining get what they deserve.)

DaveSchmidt said:

BG9 said:

That's why class action suits that share litigation costs over large pools are useful. To prohibit class actions many consumer contracts now specify mediation.

For the record: arbitration, which is different from mediation.

You're correct. I should have written arbitration. 

DaveSchmidt,

You have some very good points here.
You have very good attention to detail to see the softness in the report's Figure 7, but I think the claim that both states are increasingly reliant on their highest earners for income taxes is correct because I've read that in other non-ideological and even center-left places.  Since both states have increased their high-income brackets since 2002 and in both states the rich pull in a higher share of total income, the claim that the rich a steadily higher share of income taxes is intuitive.  

That New Jerseyans making over $500,000 pay >40% of all income taxes is corroborated by John Keevey's recent state budget writing on njspotlight.  http://www.njspotlight.com/stories/17/09/19/budget-basics-how-new-jersey-spends-your-money/

I think the author of the GSI report is correct to warn people that relying on the rich to pay such a high share of income taxes exposes a state to deep revenue drops in a recession.  In the last recession the median state lost 12% of revenues, but NJ and CT lost 18% each. 

If a state is going to be reliant on high-earners it should have a large rainy day fund, but neither NJ nor CT is saving for the bad years that will surely occur.

I think it's fair to say that NJ is more similar to CT than it is to any other state, although when you look under the hood there are details and those details explain why CT's economy has done worse than ours.
Both CT and NJ are in NYC's orbit, but NJ is a lot closer to that orbit and thus has benefitted more than CT from NYC's boom.

I know that there are sectoral differences, but I think one reason that CT is lagging NJ is that CT doesn't have an equivalent to Hudson County.  

Hudson County has been the only part of NJ to beat the national average in job growth, with 16% growth since 2010.  Hudson is only 8% of NJ's population, so that isn't enough to bring NJ anywhere up to the national average, but still, it's a bright spot that CT doesn't have. 

While a few of NJ's cities are on the rebound, all of CT's cities and towns continue to stagnate or spiral downward.  Even Stamford and Greenwich are struggling. 
But I think that the GSI report is correct that CT is highly reliant on its hedge fund industry for revenue and that when the hedge funders move out or make less money, the state is screwed.
If you look at CT, NJ, and the national average for quarterly revenue, CT has fallen off a revenue cliff since 2015, despite Dan Malloy's second round of tax increases.  
http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind0

I have read in a few places that CT is doing better than NJ in paying into its pension system, but its economy is doing worse than New Jersey's, its population loss is more persistent and steeper.  NJ is treading water economically right now, but if we tried to face our pension crisis like CT is we would accelerate our decline.  

We say that "New Jersey is kicking the can down the road" with its debts, but the analogy doesn't work.  
NJ isn't kicking a "can."  It's more like huge weight that will break your back the moment you try to lift it.  

DaveSchmidt said:

Runner_Guy said:

Absolutely right.  It's from a think-tank with an ideology.  Read it with a grain of salt.

However, the report itself is extremely informative.  So far I have not found anything in it that I think is factually wrong nor polemical.

That report was some food for thought. A few dashes of NaCl from my shaker:

— The report notes that the personal income tax “has become, in both cases, increasingly reliant on high earners (Figure 7).” Figure 7 shows an increase in the share paid by high earners, from 2002 to 2014, of 87 percent for Connecticut and 55 percent in New Jersey. Striking. It doesn’t account, however, for the increase over the years in the number of taxpayers in that bracket; a separate article I found said, for instance, that the number of Connecticut filers earning $1 million or more rose 21 percent in just four of those 12 years, from 2011 to 2015. Also, inflation alone from 2002 to 2014 was 32 percent. To me, presenting Figure 7 without caveats like those is a sign of a writer who isn’t above getting cute with the data. Everything in the report may be factual — I’ll defer to you and your study of this subject — but I don’t like it when writers try to get cute with data.

— While Connecticut may be New Jersey’s closest peer if you’re looking for a control for your economic experiment, are they really similar enough to draw all of these conclusions? One big difference, it seems to me, is the reliance on agriculture. The Garden State’s net farm income last year: $180 million. The Nutmeg State’s: a loss of $4.5 million. Or tourism: According to each state, 10 percent of all jobs in New Jersey are tied in some way to the tourism industry, but only 5 percent in Connecticut. Yet the impact of personal income tax rates can be singled out when comparing economic growth and employment rates since the Great Recession?

— I also don’t like it when union health benefits are discussed as if they were a perk, rather than as collectively bargained compensation. (As I’ve noted before, I’m a longtime union member, though in the private sector.) When Eide imagines all the savings that could be gained by cutting state retirement health benefits, he doesn’t appear to acknowledge that benefits are part of the total package; if you want to cut them, workers are going to push for compensatory increases in other areas, like wages. It’s not as if health benefits are some add-on that’s just waiting to be plucked.

— Much is made of Malloy’s belief that Connecticut can’t go to the well to soak the rich anymore. That isn’t to say, however, that he wants to roll back the last several years of policy, a la Kansas. Which leaves room to argue, if you’re into this state comparison, that New Jersey, which didn’t go to its well so much, still has that option.

— Finally, to the heart of this part of the discussion. You’re better versed on the topic than I am, so I’ll ask: Which state’s pension funds are in better shape now? The one whose economy has grown faster but is falling far short in payments, or the one whose economy has grown more slowly but is making full, or nearly full, payments? (That sidesteps the question of whether either New Jersey or Connecticut is going to fix its problem, but to paraphrase a recent MOL comment, sometimes both sides in collective bargaining get what they deserve.)

Question for either David Schmidt or Runner Guy --- both of you talked about your readings of the income tax being "increasingly reliant on high earners."  What does it look like if we look at all taxes, not only income tax? In addition to how much to tax, the question of what to tax is an important one, and I think if we're going to be arguing over how much the rich are being taxed, we probably need to look at the entire taxation picture, not just income tax.  

I don't know the answer, but wonder if through your readings one of you might?

Sorry, PVW, no light to shed here. I read the Eide report and a couple of news articles on the Connecticut income tax increases, but that was it.

PVW said:

Question for either David Schmidt or Runner Guy --- both of you talked about your readings of the income tax being "increasingly reliant on high earners."  What does it look like if we look at all taxes, not only income tax? In addition to how much to tax, the question of what to tax is an important one, and I think if we're going to be arguing over how much the rich are being taxed, we probably need to look at the entire taxation picture, not just income tax.  

I don't know the answer, but wonder if through your readings one of you might?

steeply graduated income taxes are always going to be more dependent on higher earners to generate revenue.  For example, one-third of all federal income taxes are paid by the top 1% of earners.  Given the distribution of income in the country, especially in wealthy states, that's not inappropriate. 

despite the dire warnings in NJ, the vast majority wealthy people don't move out of a state because the top marginal rate might go from 8.97% to 10.75%

and the arguments against are often deeply dishonest -- they usually don't point out that the top rate is currently 8.97%.  they just say that Democrats want to institute a 10.75% tax on high incomes.  Even people who don't earn a high income are likely to think that's unfair.  Certainly it sounds a lot more unfair than an increase from 8.97% to 10.75%.

I'll just make the general point that often your arguments appear to be those of someone who starts out with a conclusion, and then looks for evidence to back into that conclusion.

in this instance, you yourself outline a number of important differences between CT and NJ, but then you discount those differences because they don't support your premise.

Runner_Guy said:

DaveSchmidt,


You have some very good points here.
You have very good attention to detail to see the softness in the report's Figure 7, but I think the claim that both states are increasingly reliant on their highest earners for income taxes is correct because I've read that in other non-ideological and even center-left places.  Since both states have increased their high-income brackets since 2002 and in both states the rich pull in a higher share of total income, the claim that the rich a steadily higher share of income taxes is intuitive.  


That New Jerseyans making over $500,000 pay >40% of all income taxes is corroborated by John Keevey's recent state budget writing on njspotlight.  http://www.njspotlight.com/stories/17/09/19/budget-basics-how-new-jersey-spends-your-money/



I think the author of the GSI report is correct to warn people that relying on the rich to pay such a high share of income taxes exposes a state to deep revenue drops in a recession.  In the last recession the median state lost 12% of revenues, but NJ and CT lost 18% each. 



If a state is going to be reliant on high-earners it should have a large rainy day fund, but neither NJ nor CT is saving for the bad years that will surely occur.



I think it's fair to say that NJ is more similar to CT than it is to any other state, although when you look under the hood there are details and those details explain why CT's economy has done worse than ours.
Both CT and NJ are in NYC's orbit, but NJ is a lot closer to that orbit and thus has benefitted more than CT from NYC's boom.



I know that there are sectoral differences, but I think one reason that CT is lagging NJ is that CT doesn't have an equivalent to Hudson County.  



Hudson County has been the only part of NJ to beat the national average in job growth, with 16% growth since 2010.  Hudson is only 8% of NJ's population, so that isn't enough to bring NJ anywhere up to the national average, but still, it's a bright spot that CT doesn't have. 


While a few of NJ's cities are on the rebound, all of CT's cities and towns continue to stagnate or spiral downward.  Even Stamford and Greenwich are struggling. 
But I think that the GSI report is correct that CT is highly reliant on its hedge fund industry for revenue and that when the hedge funders move out or make less money, the state is screwed.
If you look at CT, NJ, and the national average for quarterly revenue, CT has fallen off a revenue cliff since 2015, despite Dan Malloy's second round of tax increases.  
http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind0




I have read in a few places that CT is doing better than NJ in paying into its pension system, but its economy is doing worse than New Jersey's, its population loss is more persistent and steeper.  NJ is treading water economically right now, but if we tried to face our pension crisis like CT is we would accelerate our decline.  

We say that "New Jersey is kicking the can down the road" with its debts, but the analogy doesn't work.  
NJ isn't kicking a "can."  It's more like huge weight that will break your back the moment you try to lift it.  

The biggest problem with NJ income taxes is that they are not graduated enough. The rate at lower incomes is way too high, especially since there are few deductions. NJ needs to lower the rates at the lower income scales and increase it at the high end.

ska said:

The biggest problem with NJ income taxes is that they are not graduated enough. The rate at lower incomes is way too high, especially since there are few deductions. NJ needs to lower the rates at the lower income scales and increase it at the high end.

the average NJ taxpayer pays 2.32% in income tax according to the Tax Policy Center https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/

Implementing a tax increase on people with taxable incomes over $500K isn't going to be particularly onerous for them. For instance, raising the rate from 8.97% to 10.75% on income over $500K for someone with a taxable income of $700K would mean an annual tax increase of $3560 for that taxpayer.  That's probably within the range of annual income fluctuations for someone like that, given variations year to year on investment income.

That's a relatively painless tax as tax increases go, and yet NJ politicians don't seem to have the spine to be able to do it.

Yeh, if a person has $1 million in the stock market, a 1% swing, which is not all that unusual in a day is $10,000.

ml1, 

Are you referring to the fact that I said that "New Jersey and Connecticut are similar" but then acknowledged a few differences?

I don't know how acknowledging that NJ has a few assets that Connecticut doesn't have weakens the basic claims that NJ's economy is still growing very slowly and that we should be cautious about increasing taxes.

Hudson County is doing better than any place in Connecticut and it helps to make NJ's jobs gains better than Connecticut, but Hudson County is one county out of 21 counties in NJ.  It has 8% of NJ's population and so is not the equivalent that New York City is for New York State.  Hudson County's 16% jobs growth since 2010 is actually only 31,000 (private+public sector) jobs.

Also, from a revenue standpoint, many of Hudson County's new jobs are at firms with tax exemptions (eg, JP Morgan, Goldman Sachs, RBC Capital, Forbes, Brown Brothers Harriman etc), so the boost to New Jersey's treasury isn't what it should be, since NJ gives back so much tax revenue to many Hudson County companies. (the appropriateness of tax incentives is a separate argument than what we are talking about, but CT has its own aggressive tax subsidy program, so this isn't a difference between NJ and CT.)

Hudson County's success doesn't negate the fact that Atlantic, Cape May, Warren, Salem, Union, Passaic, and Sussex Counties are actually negative in jobs growth since 2010 and Essex, Cumberland, Hunterdon, and Bergen are up by less than 5%.  

Just to look at Essex County in more detail, since it's our county and is well-connected to New York City, the regional jobs-engine.  Although real estate in Essex is doing well, we do not have strong jobs growth.  We are up only 0.6% since 2010 (338,461 to 340,448) .  To look at the last year, in March 2016 we had 337,178 jobs (public+private sectors).  In March 2017 we had 340,448.  That's 1% and a relatively good year for us, but the US grew by 1.6% over the same time frame.  

See the BLS site below for corroboration of these jobs figures.

https://www.bls.gov/cew/datatoc.htm

NJ's economy is growing very slowly. CT's economy is growing very, very slowly.  I don't think that's a major difference.  

In terms of ability to increase revenue, Connecticut started increasing taxes from a lower rate than NJ.  In 2009 their top bracket was only 5% and now it's 6.9%.  That's high, but not that high and it's still lower than New York State's top bracket, so Connecticut remains a compelling place to work for high-income finance jobs.  

NJ's top bracket is now 8.97%, the sixth highest in the US, and only slightly higher than New York State's 8.82% (although NYS's threshold is twice as high as ours).  

If NJ's top brakcet went to 10.75% it would become the third highest in the US and almost 3 points higher than New York State's.  (Yes, I know that NYC has its own income tax, but I am thinking of location choices by people who wish to reside in the suburbs and can choose between NJ, Westchester, and Long Island.)

Having a tax rate that is 3 points higher than New York State's might not hurt in the first year, but over time that would deter anti-tax rich people from moving here and staying here.

Finally, to bring this discussion back into the real world of NJ politics.  Phil Murphy and the Democrats aren't proposing to raise taxes to pay down NJ's enormous debts.  They are proposing to increase taxes (mostly) to increase spending.  Phil Murphy has been saying since August that his plan is to stay on the same 10-year rampup to full pension funding that Christie had NJ on.  We already know that Murphy opposes any reform to health care benefits.   

If we were increasing taxes to pay down debt I'd support it.  But increasing taxes to increase spending makes me very very worried and I think it will deprive NJ of fiscal latitude when the next recession hits and when three of the pension funds zero-out in the 2020s.

ml1 said:

I'll just make the general point that often your arguments appear to be those of someone who starts out with a conclusion, and then looks for evidence to back into that conclusion.

in this instance, you yourself outline a number of important differences between CT and NJ, but then you discount those differences because they don't support your premise.

Runner_Guy said:

DaveSchmidt,


You have some very good points here........

Runner_Guy said:

ml1, 

Are you referring to the fact that I said that "New Jersey and Connecticut are similar" but then acknowledged a few differences?

I say that because you don't seem to have really looked for many differences, and then you downplay the ones you did observe. If daveschmidt hadn't called out some differences, I think you would have been content to ignore them.

At least the Senate last night shut down one avenue for tort lawyer extortion attempts.

Burner said:

At least the Senate last night shut down one avenue for tort lawyer extortion attempts.

That's the Wells Fargo preference you're cheering for.

For years, Wells Fargo used arbitration clauses to block lawsuits from customers who alleged that unauthorized accounts had been opened in their names. Ultimately, the bank estimated that as many as 3.5 million such accounts were opened.

The bank agreed to settle some class-actions suits, but not until the CFPB, the Office of the Comptroller of the Currency and the Los Angeles city attorney’s office fined the bank over those practices last year. Even in cases that the bank settled, it had argued that the plaintiffs could not sue because of arbitration clauses.

Democrats cited the Wells Fargo case and the recent massive data breach at credit reporting company Equifax as proof that the new CFPB rule was needed to protect consumers from abuses.

http://www.latimes.com/business/la-fi-arbitration-rule-senate-20171024-story.html

Burner said:

At least the Senate last night shut down one avenue for tort lawyer extortion attempts.

another win for big banks and the consumers lose.   Guess you don't mind people being screwed by Wells Fargo and Equifax.  Another giant step backwards for this country.  

Isn't it obvious that CT and NJ would have some differences?  Saying to things are "similar" doesn't mean that they are identical. 

ml1 said:

Runner_Guy said:

ml1, 

Are you referring to the fact that I said that "New Jersey and Connecticut are similar" but then acknowledged a few differences?

I say that because you don't seem to have really looked for many differences, and then you downplay the ones you did observe. If daveschmidt hadn't called out some differences, I think you would have been content to ignore them.

the differences aren't trivial. And I don't think you've demonstrated that the states are similar enough that the way forward for both should be the same.

Ok. Whatever on how similar and different NJ and CT are.  I thought it was obvious that there would be differences, but you've yet to argue that there is another state out there which NJ is more similar to.  

But you do know what state Phil Murphy has repeatedly compared NJ to ..... CALIFORNIA?  

The follow is an exact quote.  

Jerry Brown inherited a state five years ago with a $25 billion deficit; this year? And $8 billion surplus.  It can be done.

A Democratic governor. Progressive values. Can get a state turned around.

So Murphy is right that CA raised taxes, has a booming economy, and in 2016 it had a surplus, but CA is 20x larger than NJ and it has economic moats that NJ doesn't have.  

I see CT's example as a lot more relevant. 

Source for quote:

https://burypensions.wordpress.com/2016/10/18/next-nj-governor-on-next-step-for-nj-public-pensions/

ml1 said:

the differences aren't trivial. And I don't think you've demonstrated that the states are similar enough that the way forward for both should be the same.

Runner_Guy said:

Ok. Whatever on how similar and different NJ and CT are.  I thought it was obvious that there would be differences, but you've yet to argue that there is another state out there which NJ is more similar to.

That argument is not required when questioning whether Connecticut is alike enough to conclude that it’s “a Cautionary Tale for New Jersey.” And California may be Murphy’s comparison but not mine or, as far as I know, ml1’s.

Basically, as I said, while I think there is food for thought, I’m not chowing down on it.

DaveSchmidt said:

Runner_Guy said:

Ok. Whatever on how similar and different NJ and CT are.  I thought it was obvious that there would be differences, but you've yet to argue that there is another state out there which NJ is more similar to.

That argument is not required when questioning whether Connecticut is alike enough to conclude that it’s “a Cautionary Tale for New Jersey.” And California may be Murphy’s comparison but not mine or, as far as I know, ml1’s.

Basically, as I said, while I think there is food for thought, I’m not chowing down on it.

^this.

it's about whether or not CT is a cautionary tale.  I don't think it is, and you haven't demonstrated it is.  NJ has some advantages that CT doesn't.  We're not in the fiscal messes we're in for all of the same reasons, and the way out isn't likely going to be the same.   

Runner_Guy said:

Ok. Whatever on how similar and different NJ and CT are.  I thought it was obvious that there would be differences, but you've yet to argue that there is another state out there which NJ is more similar to.  

But you do know what state Phil Murphy has repeatedly compared NJ to ..... CALIFORNIA?  

The follow is an exact quote.  

Jerry Brown inherited a state five years ago with a $25 billion deficit; this year? And $8 billion surplus.  It can be done.

A Democratic governor. Progressive values. Can get a state turned around.

So Murphy is right that CA raised taxes, has a booming economy, and in 2016 it had a surplus, but CA is 20x larger than NJ and it has economic moats that NJ doesn't have.  

I see CT's example as a lot more relevant. 

Source for quote:

https://burypensions.wordpress.com/2016/10/18/next-nj-governor-on-next-step-for-nj-public-pensions/

ml1 said:

the differences aren't trivial. And I don't think you've demonstrated that the states are similar enough that the way forward for both should be the same.

Brown has done very good job in California. If you look at his budget and economic policies he has very much been a technocrat (while mostly playing to the progressive base in other ways). But he has also been lucky. Ever since the gold rush California has been a boom and bust state. Right now its tax receipts and thus its budget is very heavily dependent on capital gains. When Google, Apple, Facebook and the other tech companies do well, as they have recently the California budget does very well. When there is bust in stocks the budget runs into big trouble very quickly. Brown to his credit know this very well and has tried to structure things to make a bust less dire on the budget, but it is inevitable that there will be hard times in California when it comes. But I would welcome Brown as governor of NJ.

I'm not really sure why I'm so attacked over the CT/NJ comparison...

If I link to something on MOL, I am offering food for thought.  I don't expect that others will agree with me or the article completely.  Even when I agree with a report's conclusion, I never agree with everything contained in the report. 

Comparisons between towns, comparisons between states, comparisons between countries should always be taken with some skepticism because no two places are ever exactly alike, but neither are these comparisons worthless either.  Left-wing groups compare states just as often as right-wing groups do when they think a comparison works in their favor, hence the many comparisons that come out between Minnesota and Wisconsin, Canada and the United States etc.  

If you believe that CT offers no valid cautionary lessons for NJ, then perhaps the caution should come from the fact that the frontrunner for the governorship wants most of his new tax revenue to go towards spending, not to pay down debt or build up a rainy-day fund.  

Finally, it's worth noting that the subject of original post here - way back in June 2016 - that Dannel Malloy has given up on income tax increases is still accurate, despite the deepening of CT's budget crisis.  Despite some demands from groups like the Working Families Party that CT increase its income tax rate to 7.5%, Malloy swatted them down with the same outmigration arguments a conservative would use.  

Runner_Guy said:

I'm not really sure why I'm so attacked over the CT/NJ comparison...

"attacked"?

If you think daveschmidt and I are "attacking" you, I can only say you must have the lowest bar imaginable for what constitutes an attack.  I don't agree with your premise, that's all.

This is where Lenny, Squiggy and Steve burst in to say, “Hello!”

You get "attacked" because you pass yourself off as someone who knows everything about governmental fiscal policy and attack when that view is questioned.  You don't acknowledge the parts of documents/studies/reports/etc. that don't support your thesis - which is always "lower taxes are good."

FYI... I thought this 2003 report from the NJ Office of Legislative Services was an interesting history of NJ's income tax up to that point.

The report corroborates the assertions made in the GSI report that over time NJ's income tax has increasingly come from high income filers.  (pp 10-11)

This report is 14 years old but it has aged well.  The trends identified here, like revenue crashes during recessions and increasing reliance on high-income residents, have continued.   

http://www.njleg.state.nj.us/PropertyTaxSession/OPI/bg75.pdf