Connecticut’s Economy Can’t Afford Another ‘Lost Decade’

C onnecticut is reminiscent of the tire fire in The Simpsons, which has been burning for more than 25 years, can be smelled in nearly all 50 states, and has no end in sight.

Yet the Constitution State is unlikely to change course come November 8, as the progressive leaders responsible for pouring gas on the proverbial fire are poised to be reelected by double-digit margins.

What once was one of the most prosperous states in the union has now suffered several generations of bad economic and labor policies. A thick malaise hangs over the state as businesses continue to flee to greener, more economically viable pastures. Within the past decade, companies such as Aetna, General Electric, and even Edible Arrangements have all left. More recently, the New Britain manufacturing company Stanley Black & Decker announced plans to cut 1,000 jobs from its finance department.

But it gets worse.

A recent study by the Bureau of Economic Analysis (BEA) found that Connecticut had the “second-largest decrease” in real GDP in the second quarter of 2022, narrowly ahead of Wyoming’s. Connecticut residents shouldn’t be looking down on the Cowboy State, however, because the BEA’s analysis also concluded that Connecticut residents’ incomes grew at the slowest rate nationwide over that same period.

A Heritage Foundation report also found that the state got the worst bang for its education-spending buck of any state in the nation, and ranked 46th in education freedom. Meanwhile, the American Legislative Exchange Council reported that the state has the third-highest electricity prices in the country.

Surely Connecticut policy-makers want the state to improve on these ignominious rankings, right?

Well, maybe not. These challenges are not new, and state elected officials have been unable to solve them. “Left Behind: Connecticut’s Lost Decade,” a recent paper published by one of my colleagues at Yankee Institute, found that the state has not fully recovered from the job losses and GDP decline that it suffered during the Great Recession, let alone from the economic havoc wrought by the Covid-19 pandemic.

Between 2017 and 2020, the state added zero — none, zilch, nada — private-sector jobs. And over the past decade, resident income has risen at the nation’s third-slowest rate; Connecticut has ranked near the bottom when it comes to adding income millionaires; and its population growth has been “non-existent” — the slowest among the 47 states that saw any population growth at all. What’s worse, deaths now outpace births in half of the state’s counties.

Connecticut even lost its “wealthiest state” title, as its per capita personal income was eclipsed by that of Massachusetts, once maligned as “Taxachusetts” but now an example of how even mild reductions in state and local tax burdens can yield notable benefits.

“All told, citizens experienced what amounted to Connecticut’s lost decade, missing out on the bulk of a ten-year national economic expansion,” the report states.

If state policy-makers opt to maintain the status quo, they will only succeed in harming residents who have stayed (and want to stay) for personal reasons. Connecticuters need to know that Hartford has learned its lesson, and that state leaders are willing to work together to address the issues plaguing their everyday lives. And they need hope that things will finally improve — that there is actual potential to “pursue happiness” here.

It is, in other words, high time that Connecticut embraced free-market, liberty-minded policies, because the alternative is more of the same: another dismal lost decade.