How mighty Connecticut has fallen
An article posted on Aug. 1 on the Forbes.com website has gone viral. Entitled “How Did Rich Connecticut Morph Into One of America’s Worst Performing Economies?” it’s an unapologetic look at the dismal state of Connecticut’s economy and the policies that have transformed it from being one of the most prosperous in the country into the only economy that actually shrank in 2012 — the one that now ranks dead last.
Written by Jim Powell, an economic historian and frequent Forbes contributor, the article has generated intense social media activity and an outpouring of comments. Perhaps because it appears in a national media outlet, it’s raising more eyebrows and generating wider interest than homegrown pieces about Connecticut that include much of the same information. It paints a grim picture of a state with every possible advantage that has been driven to its knees by unsuccessful policies that a one-party-dominated state legislature has championed for decades with unremitting consistency.
The article has clearly touched a nerve. Not a day has gone by that several people haven’t mentioned it to me spontaneously. One constituent said, “I feel bereft, like I’ve been betrayed by my own state. I can’t stay here.” Another said simply, “It’s over. Connecticut is finished.”
What has upset people so much? For starters, there’s a litany of Connecticut’s current abysmal rankings in everything from annual economic growth to per capita debt to business friendliness, as well as data on the exodus of people and businesses to other states in recent years. And then there’s a primer on the policies and practices responsible for these outcomes that reads like a guidebook on how to sink a thriving economy. These include:
• Consistent failure to focus on attracting investors and businesses in order to sustain an influx of new businesses.
• Relinquishing Connecticut’s competitive tax advantage by introducing the income tax, sustaining one of the country’s highest gas taxes, and increasing the overall tax burden more and more steeply over time.
• Relentlessly increasing state spending, nearly tripling the budget over two decades and expanding the number of state government employees significantly faster than the population for 30 years.
• Making state and local government more expensive to run by mandating the use of unionized construction companies for public projects.
• Allowing the state’s major cities to decline due to ineffective crime prevention, housing, zoning, and business tax policies.
As a framework for managing a state, these policies and practices have weakened Connecticut’s economy — called one of the country’s strongest by The New York Times in 1984 — beyond recognition. They are not working, and for many, they simply defy logic. What frightens people the most is that there’s no reason to hope they will change.
Yet there is a way. Lawmakers and the administration must listen to the clarion call of competition and look to expand the tax base instead of the taxes themselves. Doling out large one-shot forgivable loans and incentives to a few select companies doesn’t help any business, let alone all of them, address day-to-day expenses over the long term — but lowering taxes and other costs and regulatory hurdles for all businesses does. The state must stop pushing taxpayers beyond their means by respecting the spending cap and significantly reducing spending by privatizing state services where it makes sense and reforming state employee union contracts. And that’s just a start.
What more will it take for the people of Connecticut to wake up and demand a reversal of the policies that have failed them? How bad do things have to get? One concerned citizen suggested that for the public to understand the need for sweeping change and usher in a more balanced state government, we’ll have to wait until our beautiful state becomes “Detroit on the Sound”.
But this doesn’t have to happen. The alarm clock is already blaring in our ears. Connecticut must wake up now and insist that state government change course before it’s too late. Only then can we hope to see a future that is brighter than the past.
To read the Forbes article, visit forbes.com.
Ms. Lavielle represents a portion of Wilton in the 143rd legislative district, along with portions of Norwalk and Westport.