Will a new governor change Connecticut? (Not anytime soon)

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Voters are getting their hopes up that a new governor will bring new life to our flagging economy and resolve our long running state fiscal crisis. Not only is Connecticut widely viewed as the nation’s most mismanaged state, but jobs remain unchanged since 2000 amidst the nations most vigorous economic expansion. And there’s a well defined Exodus of jobs, firms and residents.

However, both our state budget and economic problems began decades ago. We’ve long been a high cost state in which to do business, largely because our public state and local public unions — one of the state’s major industries — are among the highest paid in the nation. And high costs discourage new business entering our state. Highly paid public employees require both high state taxes and high local property taxes.

Moreover our state public unions are a formidable political force in our state legislature. So it’s unreasonable to expect a new governor to substantially lower state taxes. Nor is it reasonable to expect the 169 towns and cities to substantially lower their property taxes. In a nutshell, for the foreseeable future Connecticut will remain a high cost state to do business in. And to live in.

But it’s our long-standing economic problems that are truly daunting. Economic growth increasingly takes place in modern cities, and increasingly involves hi-tech computer and manufacturing industries, assisted by cutting edge colleges and universities graduating a highly skilled labor force specializing in the STEM subjects — science, technology, engineering, math.

Yet Connecticut has only one really viable city — Stamford adjacent to New York City. It specializes in finance. Our other large cities are “welfare cities” highly dependent on state aid to meet basic social needs. Nor do they have modern skilled labor forces. Unlike both New York and Massachusetts we do not have major hi-tech industrial centers. Nor do we have prominent colleges and universities specializing in STEM subjects. In a word the modern high-tech economic world has largely by passed Connecticut.

Of course we do have about 50,000 workers employed in three world class defense firms, a still viable insurance sector in Hartford, Yale in New Haven and Stamford’s financial sector. But overall Connecticut is largely a service sector economy spread out over 169 towns and cities. Simply put we do not have a high tech modern state economy like our formidable neighbors.

The reality is that neither our long standing economic problems nor our largely self-made state fiscal crisis have easy solutions. Even under the best circumstances it will take several decades to rebuild our cities where a third of our population reside into modern industrial front line cities offering good jobs.

And it will take many years to resolve the state’s long-standing budget problems. We’re uniquely blessed with 5 percent of our population living in the Gold Coast who provide about 40 percent of our state’s income. But those funds are largely used to maintain our depressed cities, not fund a modern high-tech state infrastructure.

It’s also worth remembering that Gov. Dannel Malloy was a generally well-regarded mayor of our most developed City — Stamford — for several terms. And it’s fair to say that even if Malloy had better understood the long-running economic problems and took vigorous action on the state budget, we’d still be in major difficulty eight years later. Let’s not forget that both our economic and fiscal problems long predate him.

So a new governor might devote more resources to upgrading our depressed large cities. And he might have more success tempering our perpetual billion dollar state budget deficits. But we’ll still remain a high-cost state within which to do business and lack a high-tech modern infrastructure — the source of good jobs. And of course a new governor has little real influence on high costs of governance and property taxes in our 160-odd towns where two thirds of our population resides.

In sum, rebalancing Connecticut’s economy and finances into the modern age will take decades. Those expecting major change within a few years by a new team in Hartford will be sorely disappointed. Indeed, with a near term recession, our problems might actually deepen. For the foreseeable future Connecticut will remain a deeply troubled state.

Peter I. Berman lives in Norwalk.


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