Business Review Board / July 5, 2017

Democrat-Controlled States Face Debt Crisis

Rather than reforming government programs and cutting spending, Democrat legislatures only add fuel to the fire by increasing taxes.

Longtime Democrat-controlled state governments are running out of other people’s money. Three states in particular are in varying degrees of budgetary crisis. Illinois, Connecticut and New Jersey are swimming in debt and yet Democrats’ only solution is to call for tax increases, not spending cuts. Illinois is especially bad, finding itself staring at a growing debt crisis owing primarily to the cost of public pensions. It recently passed a massive tax hike, though Republican Gov. Bruce Rauner vetoed the bill over its failure to deal with the root cause of the problem — the public employment system. But the state senate’s Democrat majority overrode Rauner’s veto, displaying once again that Democrats dance to the tune of big unions over and against the interests of citizens. Is it any wonder that Illinois has seen its population decrease by over 500,000 since 2010?

Both Connecticut and New Jersey find themselves in similar predicaments. They’re trying to find the funds to pay for ever-increasing public pensions and retirement health care costs without actually working to reform these programs that have precipitated the problem in the first place. And their solution is always increased taxes.

By contrast, look at a longtime Republican-controlled state. Tennessee is a state where high taxes are essentially non-existent. With no regular income tax, the Volunteer State has become a magnet for businesses and Americans seeking greater freedom from oppression of government excess. The Brookings Institute ranks the state as number one in the nation for advanced industry job growth. The state government also finds itself on the opposite side of the debt crisis and sitting on a revenue surplus, as Tennessee’s constitution requires lawmakers pass a balanced budget plan each year. As a right-to-work state, it has helped to prevent the development of a political culture adhering to the demands of unions. When individual freedom is prized over collectivist sympathies, the result is a government with fiscal restraints rather than unchecked excesses.

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