A scathing assessment of the state of the state
You don't have to wander far from a recent commentary in Forbes by conservative author and historian Jim Powell, "How Did Rich Connecticut Morph into one of America's Worst Performing Economies" to see what Republicans will be loading into their election muskets this fall, to take aim at Democrats and Gov. Dannel P. Malloy.
Indeed, the long commentary is a sharp indictment of the governor and Democratic stewardship of the state, painting a grim picture of the economy and of the state's economic future.
Powell presents a long laundry list of Connecticut failures, from its high debt load and heavy tax burden to miserable rankings and unfortunate characterizations of the state by think tanks, websites and magazines.
Topretirements.com ranks Connecticut dead last in a list of good states in which to retire. Waterbury, one of the few Connecticut cities that has not lost population since the early 20th Century, was called "one of America's saddest cities," according to Powell, after an analysis by Atlantic Magazine of 10 million tweets.
Powell even cites the many crimes committed by Connecticut politicians.
"For the record," he quotes the New York Times as writing, "not everyone in Connecticut is a crook. But this is no longer obvious."
In a historical perspective on the state's current troubles, Powell paints the picture of a slow decline, from Connecticut's booming manufacturing in the 19th Century, to the bleeding today of wealthy residents and businesses, including big hedge funds, chased away by rising taxes, including 77 new tax hikes enacted in 2011.
The decline accelerated with the income tax introduced by Gov. Lowell P. Weicker in 1990, Powell asserts. Not only did the income tax not solve the state's budget problems, he says, but it accelerated spending.
State spending has tripled since the income tax was enacted, and property taxes have also gone up, Powell says. Quoting statistics from the Yankee Institute, he reports that the state's payrolls grew six times faster between 1970 and 2000 than the overall population. The state's municipal payrolls were reported to have grown four times faster.
Some of these disturbing statistics cited by Powell are sure to make their way into the gubernatorial campaign:
• Connecticut ranks 50th, the worst, in annual economic growth, according to the Department of Commerce's Bureau of Economic Analysis.
• Between 1996 and 2006, before the national economic meltdown, the number of Connecticut small businesses declined by 2.2 percent, while the average experience of all states was a 10 percent increase, Powell asserts, without citing a source.
• Barron's ranked Connecticut as being in the worst financial shape, with debt and pension liabilities a higher percentage of gross domestic product, 17.1 percent, than any other state.
It is hard to recall a statewide election in Connecticut in which the state of the economy, not just the health of Connecticut's own budget, has come into play so prominently and so early in the season.
Gov. Malloy will have to squarely address not only the miserable state of the state's own finances, but he will also have to reassure state businesses and their employees that there is a plan in place to turn the bad numbers around.
Connecticut, as Powell observes for a national audience in Forbes, is waking from its sleepy decline to a bucket of cold water in the face.
"Perhaps with the complacency of old money, Connecticut policy makers came to believe they didn't need to compete for investors and entrepreneurs - the key people who make prosperity happen," Powell wrote, noting that places like Florida and Texas, which Connecticut officials once sneered at, have new appeal.
"When investors and entrepreneurs consider important decision like where to establish a residence, where to operate a business, and, yes, where to die, they compare their options … From a financial point of view, Connecticut turns out not to be a great option."
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