As the gubernatorial campaign heats up with dozens of candidates, we’re hearing plans and promises to restore Connecticut to its former glory. Yet none of the candidates so far give any evidence of careful study of our distress — nor any evidence of being familiar with the well developed field of municipal and state economics and fiscal policies. So a new governor is likely to be more of the same.

Regaining our past glories will be a matter of decades. There are two basic challenges. The fiscal challenge requires correcting two decades of budget growth and inattention to funding future liabilities. The primary “challenge” requires addressing the 40 percent of the budget devoted to our public unions. Here there are three challenges: a) reducing head-counts; b) reducing salaries/benefits — among the highest in the nation; and, c) properly funding future benefits.

Then there are a host of secondary challenges. These include redirecting public education funding from our bloated public college system to our severely underfunded “welfare cities” where a third of kids attend school. For a state with a well recognized private college system, there’s no reason to publicly fund a large public college system. Especially one not educating students for the high demanded skills in science, math, computers and high tech. Nor is there any reason for the state to fund teachers pensions that are the responsibility of local towns. Nor any reason to use scarce public funding to support public schools of our higher income towns.

Correcting these fiscal challenges will easily take a decade to resolve and take the combined efforts of the entire legislature. A good first step would be creating a full time well-funded legislature with adequate support staffs, thereby encouraging a higher level of competence. Currently few of our Legislators have business management experience or possess financial skills commonly possessed by MBA students.

The second basic challenge requires transforming Connecticut’s economy to effectively compete in the modern hi-tech world. We’re severely handicapped here.

Growth takes place in vibrant cities. We have but one — Stamford — that’s largely a financial oriented appendage to New York City. Without modern, vibrant cities attracting new businesses, Connecticut will continue to stagnate. Change requires focusing on developing skilled labor forces and using subsidies to attract new businesses, not using scarce funds to keep existing firms from leaving the state.

We’re severely handicapped by our geography with a third of our population in roughly half a dozen fairly small cities and two thirds spread among 160 plus towns with their high cost of duplicative services. We currently rank second highest in the nation in state and local taxes — courtesy of our highly paid and bloated state budget directed toward our public unions and duplicative services among our 169 towns.

Nationally we rank second in terms of government workers belonging to public unions. As long as our towns resist co-operating to secure the economies of scale with regional services — especially for education — we’ll remain a high cost state to live and do business in. And high cost states do not attract new business — especially with our well known skills shortages.

We need to look beyond the day when our three major defense firms exit our state owing to high costs. Both Pratt and Sikorsky have large plants in the south. And Newport News has long been recognized as the nation’s most efficient producer of nuclear submarines.
Our state’s glory days, when we were the “arsenal of Democracy,” are long behind us.

The reality is that Connecticut with its small cities and 169 spread out towns is not well positioned for a front line economy. Several hundred thousand Gold Coast families provide about one-third the state’s income. And the Gold Coast families largely live in commuter towns adjacent to New York City. So any real prospects of encouraging/developing modern industries requires recasting our welfare cities as future engines of growth. Developing suitable skilled labor and reducing costs of doing business are crucial.

The reality is that Connecticut is the nation’s highest per capita income state. But that reflects the high incomes of just several hundred thousand families in the Gold Coast who are dependent on New York City. The rest of the state is well down the list in per capita income and lacks modern industries. So far our elected state leaders have focused on transferring the income from the Gold Coast families to the rest of the state. We know how that worked out.

In short, creating a viable Connecticut economy requires efforts on two fronts – recasting our state budget and creating a more modern economy. The first requires a formidable effort that might take an entire decade. Recasting our state economy is a matter of decades. The reality is that we’re a highly transient state (only a third were born here) and most of us will neither retire here nor see the required transformation to our former prominence.

Our politicians tell us a different story.

Peter I. Berman of Norwalk held positions at Bank of America, various Wall Street firms and the Chamber of Gold Mines in South Africa. He’s a published author who has made numerous presentations before municipal and state governments, the U.S. Congress. Upon retirement he taught graduate finance at the University of New Haven for several decades.

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