A new annual report from Truth in Accounting found Connecticut has $67 billion in bonded debt and unfunded retirement costs, making it the third most indebted state per taxpayer in the nation. The total debt, which amounts to $50,700 per taxpayer in the state, is based on Connecticut’s 2019 financial ...
GE Isn’t the Only One Skipping Town
General Electric’s decision to move its corporate head-quarters from Fairfield to Boston, sent shock waves through the Connecticut political class. But it isn’t just corporations and billionaires that are leaving to seek new lives and opportunities elsewhere. Connecticut ranks fourth in the nation for people leaving, trailing New York, Illinois and Alaska.
For several years, Connecticut has experienced a net loss of population and that is affecting the tax base to the tune of $60 per second. The state’s income tax earnings, which comprise nearly half of the state’s revenue, was much lower than expected for fiscal year 2016 and has legislators scrambling to make up the difference.
While many people are moving out, Connecticut is seeing an increase in immigration from foreign countries but not enough to make up for the loss of population or revenue. According to Orlando J. Rodriguez of the Latino and Puerto Rican Affairs Commission, immigrants are primarily taking low-paying service industry jobs, which result in lower taxable wages.
Connecticut faces a number of hurdles in trying to staunch the flow of people leaving the state. Families and companies seek refuge from high taxation, high property taxes and state budget shortfalls that get balanced on the back of the private sector.
While some studies have purported to show that very few people move due to tax-related issues, a recent Gallup poll says otherwise. According to Gallup, “Residents living in states with the highest aggregated state tax burden are the most likely to report they would like to leave their state if they had the opportunity. Connecticut and New Jersey lead in the percentage of residents who would like to leave their state.” High tax states continue to lose population across a wide demographic.
Millennials are leaving the state seeking lower housing prices, rents and property taxes to start their professional lives. Connecticut’s economy has also lagged behind other states making the possibility of employment elsewhere hard to resist.
Retirees are also taking their pensions and personal savings plans and moving to states without income or estate taxes. In a Hartford Courant opinion piece a Connecticut retiree said he and his peers have left, “to escape high property and personal taxes and overtaxing and overspending by Connecticut’s myopic, one-party political leaders who refuse to believe that disenchanted citizens are actually relocating.”
Moira McGarvey of the GangsAway! retirement blog wrote in the Huffington Post, “As residents of Connecticut, if we want to have more money in retirement, and keep that money and maybe even have money left over for our kids when we go to that ‘Spirit in the Sky,’ leaving Connecticut is kind of critical.”
General Electric’s departure was a wake-up call that made national news but the out-migration issues facing the state have been bubbling beneath the surface for several years. With declines in both population and revenue, the state will continue to face difficulties in attracting and retaining its most valuable asset – people.
An updated report by the Federal Reserve on Friday says that 77 percent of 4,174 people surveyed said they were doing “okay” financially during the pandemic, an increase of 5 percent since the survey was conducted in April. But the study also shows that many people are not expecting to ...