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 ...
Making Connecticut an attractive place to work again
Connecticut’s workforce – the number of people of working age in the state – is projected to shrink by 9.3 percent over the next 30 years, according to population projections released by the Demographics Research Group at the University of Virginia.
The factors driving the decline are the state’s low birth rate, an aging population and the migration of Connecticut residents to other states. The outmigration of young adults is particularly worrisome.
We’re already seeing this play out. The state workforce in Connecticut hit a peak of 1.92 million in 2011. It has slightly declined to 1.90 million, although this is a recovery from the trough of 1.85 million in 2013.
A declining workforce can have devastating effects on an economy. According to an analysis of demographic data by the Pew Research Center, these effects include business closures, falling home values, declining tax revenues, school closures and more costly social services.
The working-age population in Connecticut needs to grow in order for the state’s economy to grow. That means the state needs to add jobs to attract and retain these workers.
A shrinking workforce would put significant pressure on the state’s budget – especially if that workforce is expected to support a growing ‘dependent’ population, the number of people over 65 or under 18 years old.
This would also mean fewer workers contributing tax dollars to the state during a period when debt payments are expected to grow significantly – driven largely by the need to pay down our state employee pension and retiree health care debt.
What’s the answer to this problem? Lawmakers should focus on policies that will lead to economic growth – especially tax and regulatory reform.
We can’t compete with Florida’s warm weather or Boston’s urban landscape – so what is Connecticut’s unique value proposition? It used to be the state’s lower taxes, but that advantage has been erased.
Connecticut has a well-educated and productive population, but recent tax increases and the state’s regulatory climate are putting this advantage at risk.
It is imperative that state lawmakers adopt a pro-growth agenda in order to reverse this trend.
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 ...