Support Local News.

At a moment of historic disruption and change with the ongoing COVID-19 pandemic, the calls for social and racial justice and the upcoming local and national elections, there's never been more of a need for the kind of local, independent and unbiased journalism that The Day produces.
Please support our work by subscribing today.

State gets bad grades in economic report

Get the weekly rundown
Sign up to receive our weekly BizBuzz newsletter

Connecticut now ranks among the 10 worst states in terms of the gap between homeownership rates for whites and minorities, according to an economic analysis released Thursday.


The annual Assets & Opportunity Scorecard, a data analysis by the nonprofit advocacy group Corporation for Enterprise Development, also indicated that 39 percent of state residents were on the precipice of financial disaster — up two points from last year. And Connecticut is dead last among the 50 states and the District of Columbia in terms of average credit card debt.


In addition, Connecticut ranks in the bottom half of the states for the overall economic outcome of its residents and the percent of underemployed workers. The scorecard gave the state an F grade for its overall housing burden, a C grade for business and jobs despite being second-to-last in business creation and a B for assets and income.


“Connecticut is a high cost state, but it can become more affordable with more housing options and more higher-wage jobs,” said Jim Horan, executive director of the Connecticut Association for Human Services, in a statement.


Horan said Gov. Dannel P. Malloy’s policy initiatives, including construction of more affordable housing, improvements to public housing, subsidies for training and employment programs and a new Earned Income Tax Credit benefiting low-income working families have helped struggling residents in Connecticut.


In fact, the state’s policy initiatives were ranked seventh best in the nation, according to the scorecard, yet outcomes placed it 27th among the 50 states — down two spots from last year.


Jennifer Medina, a state and local policy manager for the advocacy group CFED, said the disparity between policies and outcomes can result from a data lag, since some of the numbers used in this analysis are from two years ago.


“Often you see a lag in terms of how long it takes for policies to make an impact,” she added.


The gap between homeownership rates of whites and minorities could be one of the areas in which different policies would make a difference, she said. For instance, the state could eliminate a requirement that people on welfare hold no more than $3,000 in savings — a rule that Medina said discourages savings and makes it harder for people to move off public-benefits programs or get a home of their own.


“Any limit, no matter how small, sends the wrong message,” she said.


Other reasons for Connecticut’s relatively poor showing in the housing realm have to do with restrictive zoning and high property taxes, according to Roger Senserrich, policy director of the Connecticut Association for Human Services.


“Connecticut generally does not build much affordable housing; most towns zone with large, single unit lots that only bring expensive one-family housing,” he said in an email.


The disparities in homeownership between whites and minorities has been growing in Connecticut faster than in most states, according to statistics. While disparities crept up 5.4 percent nationwide in a recent six-year period, Connecticut’s differential was more than double that number.


When it comes to financial security, Connecticut residents — despite recent upticks in jobs and a lower unemployment rate — are still behind most of the rest of the nation in terms of having at least three months of savings to ward off disaster after a sudden job loss or illness. In New London County, that means about $6,000 in liquid assets.


State residents also rank at the top in terms of their credit card debt, though some felt this wasn’t a big deal because Connecticut also is one of the top income states.


“The average credit score in Connecticut is in the top 10 of the country, so as bad as it is, we sort of can afford it,” Sensserich said.


Among the advocacy group’s suggestions to improve Connecticut’s economic climate for struggling families was to consider increasing the Earned Income Tax Credit from 27.5 percent to 30 percent of the federal credit.


Twitter: @KingstonLeeHow


Loading comments...
Hide Comments