The Institute for Truth in Accounting finds Connecticut has the highest “zombie index,” meaning the state “may be more likely than others to be taking on higher risk to address their debt problems.”
The index relies on a weighted average of three components – the TIA “Taxpayer Burden” measure (50%), the timeliness of the annual report (25%), and the share of total liabilities estimated by TIA to be ‘not fully disclosed’ (25%).
In turn, we note one other source of risk-taking incentive. Our “State Data Lab” includes a measure of interstate migration, through the annual United Van Lines migration survey. This survey, constructed by one of the largest interstate shipping companies in the nation, produces a statistic for “% of outbound shipments” for the lower 48 states. Looking at how the latest results for this survey (2012) line up with our Zombie Index, there is a tendency for states scoring higher on the Zombie Index to have higher outbound shipments in 2012. This can be an added source of pressure / risk-taking incentive for states in difficult financial condition, given the implications for tax revenue.
Previously, the institute named Connecticut a “turkey state” and a “sinkhole state.” Truth in Accounting also reports that Connecticut is in debt by about $46,000 per taxpayer.