In 2017, Connecticut was at a crossroads: faced with years of deficits, tax increases, and mounting long-term debt, the state decided to create “fiscal guardrails,” a set of budget and bonding rules that cap state spending and revenue by redirecting budget surpluses to reduce debt. As highlighted in a recent joint report by The Connecticut Project and Yale University’s Tobin Center for Economic Policy, the fiscal rules have been pivotal in stabilizing Connecticut’s finances in some areas, such as rebuilding the Rainy Day Fund, reducing pension liabilities, and bolstering Connecticut’s reputation for fiscal discipline.
