Connecticut’s economy remains stuck in neutral

FI-Letter-to-the-EditorTo the Editor

Connecticut’s economic recovery is so anemic that it earned the distinction of being the only state in the nation last year to show negative growth.

Hand in hand with that statistic is a stubbornly high unemployment rate of 8.1% that in all likelihood underestimates the problem because thousands have decided not to look for work or are significantly underemployed. We continue to lose manufacturing jobs at an alarming rate, particularly in the aerospace and defense sectors. We have been downgraded by credit rating agencies numerous times, received last place in the country in terms of credit quality by at least one firm and been identified as the most heavily indebted people on a per capita basis in the nation.

The unacceptably high fixed cost structure of state government combined with imprudent fiscal leadership for over a generation in the legislature, which is where the purse strings lie, has pushed the cost of government beyond the capabilities and willingness of the tax base to pay for excesses in current spending and for up to $81 billion of unfunded liabilities that exist today.

We have no choice but to borrow, tax more or do both just to stay afloat if the legislature is going to continue to increase the size of the state budget every single year going forward as they have in the past.

Over the last three years, $880 million has been committed to economic development projects. This is money the state borrows and is an extraordinarily large amount of resources for a state ranked by some as dead last in credit quality. Adding to my concern is that the bulk of the financial assistance is in the form of forgivable loans (i.e., grants). Would a better economic development policy have been to reduce taxes by $880 million to benefit companies already in the state and to make ourselves that much more competitive?

Other states appear to understand how this all works. North Carolina, Ohio, Kansas, Tennessee, and others have already initiated tax cuts and are benefiting from much healthier growth rates than Connecticut.

If we are to head off fiscal turbulence, citizens and tax payers from all over the state, regardless of party affiliation, need to send a message to the legislature to be far more fiscally prudent.

Restoring greatness to Connecticut while providing for those genuinely in need can be done, but it’s critical that every taxpayer and citizen know how precarious our fiscal house is and that they tell Hartford that they and their children deserve better.

 

L. Scott Frantz
Greenwich

The author is the state senator for Connecticut’s 36th District.

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