July 19, 2019

The Blue State Challenge

“Democrats received a mixed blessing in November when they seized complete control of state governments in California, Connecticut, Illinois and New York. They now own responsibility for fixing the dysfunctions of liberal governance even as the left wants more spending and taxes.

Anti-Trump furor helped Democrats retake the governorship in Illinois and augment legislative majorities in California, Connecticut and New York. Democrats picked up 12 seats in the Connecticut House and six in the Senate where control is split with Republicans. Democrats in New York flipped eight Senate seats and won a legislative majority for only the third time in 50 years.

With legislative supermajorities, liberals in California can raise taxes without GOP votes and in Illinois place a progressive tax on the ballot as unions have long wanted. Democrats campaigned on more spending—for schools, roads, child care, you name it. But Illinois and Connecticut are spilling red ink while the progressive tax-and-spending structures in New York and California are profiting from the Trump economy while storing up future trouble.

Illinois is forecasting a $1.2 billion deficit next year and has accrued $7.5 billion in unpaid bills despite a $5 billion income and corporate tax hike in 2017. Pensions consume 25% of state revenue, up from 10% a decade ago, yet are still only about 40% funded. Chicago is leaning toward insolvency as pension costs have doubled in a decade.”

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