Key issue: Economy

The latest tepid economic forecast for Connecticut is not good news for struggling households waiting for the state to fully recover from the Great Recession and certainly not for Gov. Dannel P. Malloy's prospects if he seeks re-election in 2014 as expected.

A series of forecasts depicting Connecticut's recovery as sluggish when compared to the rest of the region and nation suggest that the 2014 gubernatorial election will focus on the economy, unlike 2010, when candidates argued over how to best address the massive budget deficit confronting the state.

Though structural problems remain that could lead to future money problems for the state, Gov. Malloy, working with a legislature dominated by fellow Democrats, can take credit for getting Connecticut in far better fiscal health than the situation he inherited. But the governor may well get more criticism about the economy than credit for budget balancing.

The latest report came from the New England Economic Partnership (NEEP), a nonprofit organization supported by a partnership of industries, utilities, academic and health care institutions, and which works closely with the Federal Reserve Bank in preparing its forecasts.

The report characterizes Connecticut economic growth over the next four years as steady, but not robust. Connecticut's unemployment rate of 8.1 percent is forecast to drop to 7.9 percent in the next few months, and 7.5 percent by 2014.

Connecticut has regained about half the 121,000 jobs lost during the recession. It will not be until 2016 that the state can expect to return to pre-recession job levels, according to the NEEP analysis.

Economists predict over the next few years growth in retail, construction, financial services, health care and government, but little job growth in manufacturing and information technology, with job losses at the casinos as competition in other states grows - not an encouraging outlook for southeastern Connecticut.

Gov. Malloy's deficit-fixing approach - focusing too much on tax increases not enough on curbing government expenditures - remains a drag on the state economy. It is a high tax state and one with a high cost of doing business.

On the plus side, the Malloy administration is pushing sensible energy policies to reduce costs by expanding natural gas availability and creating a competitive environment for expansion of renewable energy sources.

His aggressive approach to using government investment to spur business growth makes sense in some instances, but is overly broad and lacking a clear focus. Education reforms and an emphasis on science and technology training will make Connecticut competitive for attracting industry, but that is a long-term investment.

In asking voters to rehire him, Gov. Malloy could face a tough sell in saying he has done enough, quick enough, to fix the state economy.

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