Runaway Spending: A Bipartisan Problem

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Posted by Patrick Gleason, Nathaniel Rome on Friday, June 26th, 2015, 9:44 AM PERMALINK


In a time when it seems like Republicans and Democrats cannot agree on anything, there is something that appears to have bipartisan agreement: overspending. In an analysis of state government spending in all 50 states, it is clear that all state governments are growing at an unsustainable rate, some more so than others.  

A reasonable baseline is for a state to adjust spending in line with inflation and population changes. Americans for Tax Reform used the Tax Foundation’s handy state spending calendar to find out how state spending over the last decade compared to inflation and population growth. The chart below shows how cumulative state spending in all 50 states has increased at a much faster rate than population growth and inflation. The orange line below shows change in population and inflation from 1999 to 2009. The blue line represents growth in total state government spending during that period.

First, here is the national trend, looking at all 50 states:


(Source: U.S. Census Bureau, Tax Foundation)

This information is more useful if we break it down state-by-state to see who the worst offenders of overspending are. Below is a table of each state and the percent that they overspent beyond the rate of growth the population and inflation over the 10 year period from 1999 to 2009:

State

Overspending  Percent

California

36%

Wyoming

33%

Oklahoma

31%

Mississippi

31%

Kansas

31%

Wisconsin

31%

South Carolina

27%

Rhode Island

27%

Florida

27%

Maine

26%

New Mexico

25%

Indiana

25%

Colorado

24%

Nebraska

24%

Vermont

24%

Pennsylvania

24%

Kentucky

23%

Illinois

23%

Louisiana

23%

Ohio

23%

Maryland

23%

Arkansas

23%

Minnesota

22%

New Jersey

22%

Missouri

22%

Arizona

22%

Delaware

22%

North Carolina

22%

Iowa

21%

Alabama

21%

Idaho

20%

Texas

20%

Tennessee

20%

Michigan

19%

Montana

19%

New York

18%

Alaska

18%

Virginia

16%

Washington

16%

Georgia

16%

North Dakota

16%

Massachusetts

16%

South Dakota

16%

Hawaii

15%

West Virginia

14%

Oregon

14%

Connecticut

14%

Utah

12%

New Hampshire

9%

Nevada

8%

(Source: U.S. Census Bureau, Tax Foundation)

The biggest overspender is (unsurprisingly) California. California alone overspent by nearly $347 billion – more than the GDP of Denmark – over the decade from 1999 to 2009. But what is surprising is that each and every state overspent by billions of dollars. 33 states overspent by more than 20 percent beyond the rate of growth in population and inflation, and all but two states overspent by at least 10 percent.

State budgets have been a mixed bag this year, with some states confronting shortfalls and some who have surpluses. For state lawmakers still grappling with how to balance a budget – either through cutting spending, raising taxes, or a combination of the two – the numbers demonstrate that the problem is on the spending side of the ledger.

 

 
Photo Credit: 
401(K) 2012, https://www.flickr.com/photos/68751915@N05/

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Governor LePage Plans March to Zero on Income Tax in Maine

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Posted by Caroline Anderegg on Friday, June 26th, 2015, 9:39 AM PERMALINK


Governor Paul LePage (R-Maine) is taking no prisoners on the road to zero state income tax.  The governor vowed to send back vetoes on every piece of legislation that comes across his desk until Maine’s legislature passes his bill.  He sent back 50 vetoes on Monday and Tuesday of this week alone.

LePage wants to do away with income tax in his state; however, he’ll need cooperation from Maine’s legislature.  In response to their pushback, the governor has decided to try the route of a citizen’s initiative in order to lower the income tax on the road to fully getting rid of it.

Because eliminating Maine’s income tax would require an amendment to the state constitution approved by the state House and Senate as well as the majority of voters, and the legislature isn’t giving their necessary two-thirds stamp of approval, LePage is postponing his plan to totally cut the income tax.  In the meantime, he plans to lower the income tax to 4 percent through a ballot initiative, beginning in September.

“I can’t eliminate it through a people’s initiative, but we can lower it. And I will be doing that," he said. “And I’m also going to bring back a bill in January to eliminate the income tax again. Since it happens to be an election year, I want in fresh in people’s mind when they go to the polls.”

Getting the initiative on the ballot will be no small feat, though.  LePage plans to gather the thousands of signatures necessary to get the measure to a vote by using a town hall-style approach to get his message out, as he did earlier in the year when he was pushing his original tax reform proposals.  Though he has a lot of work to do to accomplish his goal, his method of taking his message to the people has had mixed reviews in the past but he believes it can work this time.

Gov. LePage is unwavering in his dedication to lowering and eventually doing away with Maine’s income tax entirely, and rightfully so.  Of states levying an individual income tax Maine’s ranks 9th highest in the nation at 7.95 percent, down from 8.5 percent when he signed the largest tax cut in state history in 2011.  LePage’s ballot initiative is the necessary next step in allowing the people in Maine to keep more of their hard earned income.

Photo Credit: 
Maine Department of Education (https://www.flickr.com/photos/mainedoe/)

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Meet the Shredder That Destroyed Lois Lerner's Hard Drive

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Posted by Conner Lynch on Thursday, June 25th, 2015, 2:15 PM PERMALINK


Lois Lerner’s hard drive met its end in the amoral maw of an AMERI-SHRED AMS-750 HD shredder, according to testimony submitted today by the Treasury Inspector General for Tax Administration.

In 2011, after an IRS-contracted Hewlett Packard technician serviced Lerner's laptop and determined the hard drive "more than likely crashed due to an impact of some sort," and after a different technician in the IRS Criminal Investigation Division noted there was “some scoring on the top platter of the drive,” the hard drive made its way to a recycling facility in Florida operated by the Federal Bureau of Prisons.

The testimony states:

“We determined by obtaining the certificate of destruction dated April 16, 2012, interviews with the facility manager, and a search of the facility, that this shipment of hard drives was destroyed using an AMERI-SHRED AMS-750HD shredder. TIGTA agents observed the shredder in operation and noted that the shredder cut the inserted hard drives into quarter-sized pieces, and according to the facility manager, those pieces are then sold for scrap.”

Video footage of the 7.5 horsepower, 2,700-lb. shredder in action can be found here

Photo Credit: 
Ameri-Shred Corp., http://bit.ly/1NksoEn

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ATR Opposes Massive New Excise Tax on Vapor Products in Washington State

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Posted by Paul Blair on Thursday, June 25th, 2015, 2:11 PM PERMALINK


In a letter to legislators in Washington, Americans for Tax Reform reminded members of the House Finance Committee of the potential consequences of raising taxes on electronic cigarettes and vapor products. Now into their second special session on the budget, legislators are scrambling to tie up loose ends to fund their overspending problem.

Click here for a PDF of the letter. 

This afternoon, behind closed doors, legislators will debate House Bill 2211, which includes a new 60 percent tax on the wholesale cost of e-cigarettes and vapor products sold in Washington. The threat of this tax has already forced a medium-sized company that employs more than 100 Washington residents to begin its relocation to Arizona.

“These bills are a clear existential threat to our business,” Mt. Baker Vapor explained. “Even if the bills did fail, Governor Inslee has another year left in office and has made it clear that he will continue tormenting our industry.”

The vaping industry and the consumers who are using the products have been a top target for state lawmakers since the products began gaining popularly among smokers looking for an effective way to quit with a healthier alternative product.

Electronic cigarettes and vapor products don’t contain the tar or countless carcinogens that can produce cancer, illness, and disease. Where some see a new technology that is helping people quit smoking, cash-hungry politicians like Gov. Inslee and his legislative allies in Washington see a new target to tax.

The letter to the House Finance Committee from ATR president Grover Norquist can be read below:

Dear Representative,

I write today in opposition to House Bill 2211, which would impose a 60 percent tax on e-cigarettes and vapor products sold in Washington. Not only is this a massive tax increase that will hurt small businesses in Washington, but to impose a massive tax on vapor products makes little sense from a health perspective as well.

This 60 percent tax will make Washington extremely uncompetitive in e-cigarette and vapor product pricing, leading to an increase in online purchasing. E-cigarettes will prove to be an extremely volatile source that costs in-state businesses tens of thousands of dollars in lost sales, resulting in even less revenue for the state government. 

The threat of onerous taxation on vapor products and businesses has already resulted in the announcement that Mount Baker Vapor, which employs more than 100 Washington residents, will be relocating to Arizona this year. The income, property, and sales taxes generated by this medium-sized company will no longer be collected in Washington as a result of legislative threats like HB 2211.

Taking aim at e-cigarettes with higher taxes works at cross-purposes with efforts to cut down on the harm associated with smoking. Mitch Zeller, Director of the Center for Tobacco Products at FDA has recognized this reality. He recently noted, “If we could get all of those people to completely switch all of their cigarettes to one of these non-combustible products, that would be good for public health.” 

A number of studies have shown that electronic cigarettes stand to improve health and prevent disease. By choosing to “vape” e-cigs instead of smoking traditional tobacco, consumers get their nicotine fix without the combustion and smoke, which are responsible for many of the negative health effects of tobacco cigarettes.

With e-cigarettes, the free market has provided a solution to a problem that social engineers have not been able to address through stiff government regulations. The imposition of new taxes on innovative products that reduce smoking and people’s dependence on tobacco cigarettes is misguided and will impede proven harm reduction methods. It makes little sense in this fragile economy to impose hundreds of thousands of dollars in higher taxes on a product that provides consumers a viable and harmless alternative to traditional tobacco products.  

I would urge you to reject House Bill 2211 in its present form and in any form that imposes an excise tax on e-cigarettes and vapor products. Not only will the tax yield insignificant revenue for the state, it will keep smokers from transitioning to a far healthier alternative. While this might protect state cigarette tax revenue, it will continue to impact state health care costs in a far more detrimental way. 

Support our efforts to fight e-cigarette and vapor tax hikes by clicking here. 

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Chris

That's a great letter from the boss. ATR has been doing an amazing job standing up for both small vapor products businesses, and tobacco harm reduction. It's much appreciated by this small vapor products business owner.


Inspector General: Lois Lerner’s Hard Drive “More than likely crashed due to an impact of some sort”

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Posted by Alexander Hendrie on Thursday, June 25th, 2015, 12:49 PM PERMALINK


Lois Lerner’s hard drive “more than likely crashed due to an impact of some sort,” according to Congressional testimony submitted today from the Treasury Inspector General for Tax Administration (TIGTA).

According to the testimony, Lerner’s laptop stopped communicating with the IRS server on Saturday June 11, 2011, between 5:00 p.m. and 7:00 p.m. On Monday June 13, 2011, Lerner reported the laptop inoperable. Her laptop was then serviced by an IRS IT staff technician and a Hewlett-Packard contractor:

“When asked about the possible cause of the hard drive failure, the HP technician opined that heat-related failures are not seen often, and based on the information provided to him, the hard drive more than likely crashed due to an impact of some sort. However, because the HP technician did not examine the hard drive as part of his work on the laptop, it could not be determined why it crashed.”

Lerner Hard Drive Contained “Scoring on the top platter”

On July 19, 2011, Lerner asked IRS IT to try to recover the lost data in order to find “personal information.” The hard drive was passed from the IRS IT technician to the IRS Criminal Investigation Division (IRS-CI). The attempt to recover the data was not successful.

Curiously, the IRS-CI technician “noted some scoring on the top platter of the drive, and he believed there were additional steps that could have been taken to attempt to recover data. IRS IT management determined the extra effort to recover data from Ms. Lerner’s hard drive was not worth the expense.”

Photo Credit: 
US House of Representatives Committee of Oversight & Government Reform

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ne14a1e

That dress is the same one Hillary is so fond of. Must be the color of choice for corrupt federal officials.

iVillageIdiot

The "impact of some sort" why-I-lost-my-memory defense. Works for hard drives containing potentially incriminating evidence and Secs of State that want to delay testifying in front of a congressional committee with equal efficacy.


Amtrak Wastes Billions on Fraudulent Wages

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Posted by Kendyll Ferrall on Thursday, June 25th, 2015, 10:00 AM PERMALINK


Amtrak employees have apparently discovered time travel.

At least, that's one explanation for the report released by the Amtrak Office of Inspector General (AOIG) last week that discovered employees are claiming to have worked upwards of 47-hour days. The report found that discrepancies in employees’ reported hours are largely the result of the increasingly complicated and intricate union agreements Amtrak must enter into every year. The analysis embodied six years of documented waste and abuse stemming from fraudulent and inaccurate timesheets.

Last year, Amtrak entered into 23 separate bargaining agreements with the 14 different unions that cover the train service’s 19,300 employees. Each agreement contains complex and specific rules for calculating an employee’s hours and wages. Under the agreements, Amtrak uses six different timekeeping systems to process the 4.5 million daily timesheets and calculate pay.

In addition to the eyebrow-raising work day claims, the investigation found instances of employees who reported to have worked over 100-consecutive days and who recorded working 957 weeks with only overtime hours and no regular hours. The AIOG report found that employees claimed to work 2,381 weeks with at least 40 overtime hours on top of their regular 40 hours.

The federally-owned rail line spends $1.2 billion on wages as the result of fraudulent and inaccurate timesheet data. Requests for overtime-pay in 2014 totaled $199 million; roughly 25 percent of regular wages paid. Nearly a third of Amtrak’s budget goes to labor costs for employees under the union agreements that are making it difficult for employees to accurately report their hours.

The AOIG found that employees belonging to the Amtrak Service Workers Council were responsible for repeatedly reporting the most overtime hours without regular hours, with the highest claim at 769 hours over nine weeks. Employees covered under the Brotherhood of Railway Signalmen and the Brotherhood of Maintenance of Way Employees had the highest instances of reporting overtime hours that totaled more than 100 percent of their regular hours.

The AOIG’s investigation into wasteful spending at the hands of the unions came on the heels of calls to increase Amtrak’s funding after May’s deadly train derailment. The report was released on the same day that Sens. Corey Booker (D-N.J.) and Roger Wicker (R-Miss.) introduced S. 1626, a bill that would increase Amtrak’s funding to $9 billion over the next four years. The Railroad Reform, Enhancement, and Efficiency Act calls for $1.4 billion more than its House counterpart, but this report shows that the last thing Amtrak needs is more taxpayer money.

If Amtrak wants more money to improve its safety and increase its efficiency, maybe it should start with the millions of dollars that are being wasted on labor.

 

Photo Credit: 
Bill Dickinson https://www.flickr.com/photos/skynoir/

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alsports2000

Make the so called brotherhood pay all that money back so that I can have enough money myself to take care of my dental bills...

finnegan

Easy solution. CEO bonuses and union employee salaries and raises for all government agencies should be determined by how much money they SAVE in their departments per year.

Lickylick

Um, wasted taxpayer money???? Sounds more like theft of taxpayer money. Every employee known to have stolen money through fraudulent timesheets should have to pay the money back plus be charged with the crime of stealing public funds and stand trial. They are thieves committing felonies.


Oh Weird: The IRS Deleted 422 Backup Tapes With Lerner Emails

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Posted by Alexander Hendrie on Thursday, June 25th, 2015, 9:41 AM PERMALINK


The IRS “accidentally” erased 422 backup tapes that investigators believe contained emails to and from IRS official Lois Lerner, according to the Associated Press.

The tapes contained as many as 24,000 Lois Lerner emails. The tapes were erased eight months after Congressional investigators requested all emails to and from Lois Lerner and a month after the IRS informed Congress they were missing some of Lois Lerner’s emails.

“If the establishment press treated Richard Nixon’s missing audio the way they are treating the destruction of emails by the Obama IRS, Nixon would have served a full eight years as President,” said Grover Norquist, president of Americans for Tax Reform. 

Photo Credit: 
Ray Tsang

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bittman

I sincerely doubt if any intelligent person believes that the destruction of the back-up tapes was accidental.


Ex-Im Bank Blames “Capitalism” After Losing $150 Million on Risky Loan

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Posted by Emma Boone on Thursday, June 25th, 2015, 9:30 AM PERMALINK


The Export Import Bank, criticized for its ties to fraud, waste and abuse, has left taxpayers on the hook for $150 million dollars thanks to another reckless loan.

In 2012 Ex-Im provided $280 million to NewSat, an Australian satellite company, to purchase a satellite from U.S. based Lockheed Martin. Just months after receiving the loan, NewSat declared bankruptcy.

This disgraceful loan has led to House Oversight and Government Reform Committee investigating Ex-Im’s financing of the satellite company. Acting Inspector General of Ex-Im, Mike McCarthy, admitted that since NewSat declared bankruptcy the deal has led to the loss of at least $150 million in taxpayer funds.

Ex-Im President Fred Hochberg defending the NewSat deal describing it as “a project that’s in labor” and arguing that these careless loans are “what capitalism is about.” Aside from the absurdity of these statements and Hochberg’s sad attempt to tone down yet another loan failure, had Ex-Im done their homework, this million dollar disaster could have been avoided.

A report released by NewSat shows the company’s financial problems and irresponsible spending patterns, at one point spending $1.2 million on travel alone in a three year span. Taxpayers should be outraged at the millions of taxpayer dollars Ex-Im wastes loaning mismanaged foreign companies.

Perhaps most concerningly, it appears that former CEO of NewSat and Chairman Fred Hochberg had established a business relationship long before Ex-Im handed out the multi-million dollar loan. This cozy relationship yet again raises questions about Ex-Im working with companies based purely on political connections.

The outdated Ex-Im Bank is set to expire at the end of the month and supporters of the bank are frantically searching for a way they can to hold on to this instrument of crony capitalism. Congress should put an end to the culture of corporate welfare and political favoritism and end the Ex-Im Bank.

Photo Credit: 
David Scaglione

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Report Shows Americans Flee High-Tax States, Embrace Low-Tax States

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Posted by Conner Lynch on Wednesday, June 24th, 2015, 4:00 PM PERMALINK


Americans are fleeing states with high taxes for low-tax states according to recent analysis by John Schoen and CNBC.

By inspecting data from the Federation of Tax Administrators and national moving companies United Van Lines and Atlas Van Lines, a clear link appears between higher taxes and residents looking to relocate. Not surprisingly, these individuals are looking to migrate to states that encourage innovation and economic growth rather than stay in hostile business and tax climates.

Low Taxes Precipitate Population Inflows

As states lower their tax rates, they can expect individuals to flock there for better jobs, higher wages, and greater opportunity. As Travis Brown describes, states with the lowest tax rates like Texas are experiencing booms in their populations under the age of 18 while those states with high tax rates lost a large percentage of their youth population in recent years:

“Many of the states that lost a significant percentage of their under-18 population between 2000 and 2013 are those with fewer opportunities for growth – thanks to high tax rates that discourage innovation and expansion. Ranking at the very bottom, with its youth population decreased by 15.9 percent, is Vermont. Not at all coincidentally, Vermont also levies the nation’s seventh-highest personal income tax rate on its working citizens.”

Predictably, as younger people seek to find new jobs and opportunities, the obvious choice for residency is low-tax states. If states drastically increase the cost of working and living, they will lose their younger population to places that welcome their innovation. Brown claims that these pro-growth states are drawing in the best young talent across the nation:

“Clearly, population grows more quickly in places where work is rewarded and the price on that work is kept low. But the key new piece of information that the 50-State Scorecard shows us is that a large segment of the next generation of American business leaders and innovators are growing up in states that encourage growth.”

Tax Increases Force Exodus of Businesses and Residents

As many states wrap up their legislative sessions and finalize their budgets, the evidence is clear that states that choose tax increases see losses of both residents and businesses. Connecticut recently finalized its budget and passed a $1.2 trillion tax hike that raised income, sales, and corporates taxes. In response, GE and other major companies are looking to relocate and find a state that would welcome their business and jobs them rather than simply hike their tax rates. In addition, the CNBC study shows that Connecticut has experienced a net outward household flow of 58 percent in recent years while also levying some of the highest taxes in the country. This leads one to believe it’s probably not a coincidence.

As states move forward and examine their tax policies, the results are clear. Lower taxes leads to increased migration, population booms, balanced budgets, and economic growth. Higher taxes lead to net citizen and business losses, stagnation, and budget deficits. It appears the choice is a clear one.

 

Photo Credit: 
Ken Teegardin, http://bit.ly/1dgMD8S

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Florida Governor Rick Scott Cuts Spending and Taxes in 2015

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Posted by Paul Blair on Wednesday, June 24th, 2015, 3:12 PM PERMALINK


This week, Governor Rick Scott (R-Fla.) signed a 78.2 billion budget that included a historic $461.4 million in line item spending cuts, among the largest cuts ever made by a governor. This comes on the heels of a $429 million tax cut package, which he signed just last week.

Taxpayers have a friend in Gov. Scott, who said this of his cuts: “I went through the budget looking at every project and saying: What’s a statewide priority? Can I get a good return on investment? Has it gone through a state process?”

In his letter to the legislature, he explained why he line item vetoed specific projects by noting:

“Tax revenue is generated by Floridians who are working hard to provide for their families and we are committed to effectively using these dollars by investing them in areas with proven results. That is why I have vetoed $461.1 million in special projects.”

Below is a list of several special spending projects inserted into the budget by lawmakers, both Republican and Democrat alike:  

  • $300,000 for a water taxi on Clearwater Beach
  • $1 million for the restoration of a marina in Pahokee
  • $1 million to expand a library in Palm Harbor
  • $5 million for “strategic land acquisition”
  • $250,000 for the Institute for Cuban and Cuban-American studies, which already received $600,000 for two prior reports
  • $1.5 million for Teach for America
  • $260,000 for the Therapeutic Performing Arts Therapy program
  • $140,000 for “Nature’s Paradise”
  • $500,000 for a children’s “ability center”
  • $5.5 million for no-bid contracts for wetland/chemical treatment systems and two floating aquatic vegetative tilling treatment systems
  • $550,000 for “promotional awards” at the Department of Agriculture and Consumer Services”
  • $2 million for a horse park
  • $250,000 for the Arcadia Rodeo
  • $10 million in “Quiet Zone” improvements
  • $500,000 in media campaigns to publicize the dangers of unlicensed real estate activity
  • $500,000 for the Circus Arts Conservatory
  • $500,000 for the relocation of the Miami Boat Show
  • $61,366 for the a Plant Museum in Tampa
  • $200,000 for a contemporary dance company in Miami

 

A health insurer also tried to pass on the costs of federal Obamacare taxes onto state taxpayers. Rick Scott put a stop to $136,000 in that expenditure and hundreds of thousands in tax dollars intended to fund electronic medical record systems for private organizations.

The governor also vetoed millions of dollars in local water treatment and improvement projects; expenditures the governor rightly argues must meet a statewide investment benefit.

At the conclusion of his letter, Scott again voluntarily reduced his state-funded salary to one cent per month.

For Republican governors looking for role models, one needs to look no further than the Sunshine State where a beacon of hope remains. Transparency remains an effective disinfectant for out-of-control spending and Scott’s vetoes send an effective message to legislators, even in years where the state has a surplus: taxpayers will not be swindled by back-room budget deals; the governor is watching. 

Click here for the full list of vetoes. 

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Keith Allsop

He is in CT poaching jobs LOL. CT democrats - no tax increase left behind.


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