In its recent editorial (“Cautionary Tale From Connecticut,“) the Providence Journal claimed that “Connecticut is a sea of dysfunction.”  The facts show that nothing could be further from the truth.

It is true that Republican governors John Rowland and M. Jodi Rell, who controlled the state for 16 years before Democratic Gov. Dannel Malloy took office in 2011, mismanaged the state.  But under Democratic governors Dan Malloy and Ned Lamont, and the Democratic-controlled legislature, Connecticut has dramatically improved its economy and fiscal status.

Contrary to the Providence Journal’s claims that Connecticut “overspends,” the truth is that Connecticut is a low-tax state.  According to North Star Policy Institute, Connecticut’s ratio of total government expenditures to state GDP ranks second lowest of the 50 states.  Only New Hampshire spends less on government relative to GDP than Connecticut.

Further, According to Ernst & Young’s 2019 study of state corporate tax rates for the Council on State Taxation (COST), Connecticut’s total effective business tax rate ranks the fourth lowest of the 50 states.  And Connecticut’s total corporate tax revenues comprises the smallest percentage of state tax revenues of any state, by far.

Connecticut hemorrhaging jobs?  In fact, during Democratic Gov. Malloy’s eight-year term, the state gained 86,000 private sector jobs, setting an all-time high.  In comparison with the previous Republican Rowland-Rell administration, Connecticut under Malloy added twice as many private sector jobs in half as many years.

Connecticut losing companies?  When Gov. Rell left office in 2011, there were 11 Fortune 500 corporate headquarters in our state.  When Gov. Lamont took office this year, the state was home to 17 Fortune 500 HQ’s.  In fact, USA Today lists Connecticut as one of the top ten states with the highest concentrations of Fortune 500 headquarters per population.

What Connecticut has not done is expand its government sector.  Under the previous two Republican governors, a third of all the jobs created in the state were in the government sector.  By contrast, Governors Malloy and Lamont have shrunk Connecticut’s government workforce to the lowest level in more than two decades.  Indeed, USA Today ranks Connecticut as the 9th leanest staffed state government in the country.

Yes, the two previous Republican governors badly mismanaged our pension funds.  But Govs. Malloy and Lamont have implemented major reforms.  In 2017, Malloy signed a ten-year agreement with state unions featuring give-backs that outside actuaries estimated will save taxpayers $24 billion over two decades.  Malloy and Lamont have now fully funded the state’s required contributions to its teacher and state worker pension funds for the past decade.  The state estimates that contributions to the state pension fund will soon plateau, then begin to fall.  Governor Lamont just signed into law major reforms in the state’s teachers pension fund that stabilize pension contributions that were facing dramatic increases.

The claim that the Connecticut is burdened with high debt levels is incorrect.  While state government-level bonded debt is higher than average, municipal debt is far lower.  According to the Connecticut Office of Policy and Management, Connecticut’s total bonded government debt as a percent of state GDP ranks us in the middle of the 50 states.

When Gov. Malloy took office, Connecticut was home to 11 billionaires.  Today, 17 billionaires call Connecticut home.  And according to Phoenix Wealth Management, the number of millionaires has expanded nearly 20 percent since 2010, raising Connecticut from 4th to 3rd in the nation in millionaires as a percent of the population.  We also rank 5th highest in median household income.

In short, Connecticut’s debt is modest; our unfunded pension liabilities are manageable; more billionaires and Fortune 500 companies are calling the Nutmeg State home than ever before, despite UTC’s pending departure.  And we continue to improve our already high quality of life.

Our strict gun laws enacted after the Newtown massacre led to the steepest decline in violent crime of any state in the nation.  Our crime rate is the lowest in half a century, while our prison population has dropped to the lowest level in a quarter century.

Public financing of elections has eliminated the rampant corruption of the Rowland-Rell era. We’ve implemented paid sick leave, paid family and medical leave, protections for women’s reproductive rights, a $15 per hour minimum wage, and codified key elements of the Affordable Care Act in state law.

The Providence Journal’s editors should visit our wonderful state, get the real story about our economy and state government, and enjoy our excellent quality of life.

Sean Goldrick is a retired investment professional who served as a Democratic member of the Greenwich Board of Estimate and Taxation, the town’s finance board.

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15 Comments

  1. Sean…you really need to take a little drive east. I realize it is hard for residents of Greenwich to fathom that Connecticut is not doing well, when they are doing exceptionally well. If you drive east, stop and take a walking tour of Bridgeport. If the depression doesn’t destroy your soul, get back in your car and keep driving. What’s that? You’re stuck on the Merritt? Governors and CT DOT have been working, non-stop, on the Merritt for at least the last 50 years. Is it a wonder that CT DOT has administrative costs that are 9X the national average?

    Another traffic nightmare in Meriden? Just stay on the Berlin Turnpike and take in the splendor of strip mall shopping. On your way into Connecticut’s capital, perhaps you and your wife would like a relaxing afternoon at The Art Cinema? Nah…skip it. When you get to Hartford, Mayor Bronin will be happy to share all sorts of depressing information. At the top of the list…50% of the students in the school system are missing from class everyday. Last year our Capital city teetered on the verge of bankruptcy…it was in all the papers. I understand your neighbor, Ray Dalio, has a way to keep the kids in school. I can hardly wait.

    Read The Hartford Business Journal in the past two weeks and you would have seen a stream of companies, and jobs, leaving Connecticut. I live in East Hartford. My mil rate is 48. I believe Greenwich is around 11. Here is an idea. Let’s sell Greenwich to New York for about $30 billion. We pay off most of CT debt, adjust a large number of public salaries for managers down, adjust a large number of pensions down, and then live within our means

    1. David is raising an entirely different set of issues that those to which Sean was speaking. Connecticut is not in such dire shape in terms of tax burdens, public sector employment, and even unfunded liabilities–BUT David is entirely right about the visible challenges in the state, the poor transportation infrastructure, the travel congestion, the utterly inadequate public transportation, the absence in many regions of economic opportunity, the destructively high property tax rates in many of our communities. What he is speaking to is the state’s ECONOMIC HEALTH–not its fiscal health. And in fact he is very much on target–we have seen our economy SHRINK by nearly 10% in terms of real output since 2008; we still have fewer people employed in CT than we had in early 2008; the quality of jobs created in CT have been of lower quality/pay than those we have lost. We have huge challenges restoring our competitiveness–and we aren’t addressing that challenge coherently.

  2. Congratulations Mr. Goldrick on your successful career as an investment professional residing in Greenwich. Judging by your profession and residence, it would seem that you chose wisely while on your career path. Those who chose a career in manufacturing in CT, like my father-in-law, have not been so fortunate. His employer relocated the company to Texas.

    Boasting that CT is a low tax state comes across as tone deaf and ignores the fact that many economists consider the state to have one of the highest tax burdens in the country. For instance, the Tax Foundation, an independent tax policy nonprofit, has us listed as #2. You ignore the property taxes on our homes and autos, the 6.3% sales tax, and a state income tax. My parents were forced to spend their retirement elsewhere (TN) as they could no longer afford to live here. Now they have a property tax 1/10 of mine on a home that is 40 years younger (same size) and no state income tax. Yes, their sales tax is higher, but two out of three isn’t bad.

    Blaming the two previous Republican governors for mismanaging the state and its pensions ignores the fact that both dealt with Democratic majorities in the legislature (at times veto proof). In fact, the last time Republicans had control of the governorship and one branch of the CT legislature was 1995-96, the first two years of Rowland’s first term. Last I checked, it’s the legislature that controls the power of the purse.

    And during every legislative session it seems as though there’s an attempt to find new revenue streams through new goods and services to tax or requiring licenses for occupations or recreational activities or increasing the fees on said licenses. Pension “solutions” appear to be just in the form of debt restructuring such that the proverbial can is kicked down the road, which is how this problem started decades before the Rowland and Rell era (CT Mirror did an excellent history on it).

    No, I think the Providence Journal is spot on in their cautionary tale about CT. And with the threat of tolls coming down the line, I think tax matters will only continue to get worse. At least for those of us who aren’t investment professionals living in Greenwich.

    1. We welcome your comments but please note that our guidelines require that comments be limited to 1,000 characters. We will not be able to approve comments that exceed that limit going forward.

  3. That E&Y study is used frequently by Democrats at election time (Sen. Looney loves it) to make an argument that CT is a great place to do business – it is not. That study ignores the TOTAL REAL COST of doing business in our state.

    Mr. Goldrick, do you read the news? Do you understand the states balance sheet? Do you understand we have had no real economic growth since 2004 and some say that can be traced back even further? Do you not understand why large corporations are investing elsewhere? Do you not realize that a small population in Fairfield county pay the vast majority of the bill and many are asking why? Is the business community under some form of mass delusion and they decided to team up and bad mouth our own state because that would help us grow our economy? Who do you think is paying the majority of taxes? Who do you think has invested more in hard dollars, the employer or the employee? Who do you think has risked more, those in the private sector or our largest employer – the government of CT with a massive oversized public sector for our population and benefits and bonuses that the private sector can only dream of.

    Business leaders know that CT will face insolvency as fixed costs soar (over the next 20 years) and that businesses will be asked to pick up the tab for decades of unsustainable progressive policy promoted by a Democrat legislature that had complete control of both houses for almost 40 years.

    The comments from Rhode Island, while hurtful are actually mostly true and this latest budget does nothing to turn Connecticut around, in fact, it will accelerate the downward economic spiral we created for ourselves. Wake up Mr. Goldrick.

    1. Wrong info here: CT grew 3% annually in REAL terms 1997 through 2007. So it is NOT the case that there has been no growth since 2004; what perhaps Justin wanted to say is that the economy has now shrunk to where it was in 2004–which is essentially correct as from 2008 CT’s economy did shrink, about 1% annually in real terms, until 2018, when we finally saw modest but real growth.

      1. Thank you for the correction. Yes we did have a few growth years over the entire period (it would be almost impossible not to as we have finance and defense contractors) but the point I was making was that we are no better off than we were in 2004. I would argue we are in much worse shape now for businesses because we have even higher taxes, higher cost of living and more mandates/regulations since 2004 while adding billions more in debt and more contractual obligations.

        Politicians have refused to make the tough choices and business leaders will be forced to leave. They will do whatever they need to survive, including shutting down or laying off but the larger ones will just invest elsewhere – and that is precisely what is happening – the tightening of the downward spiral until we become insolvent.

  4. Sean is dead bang on in terms of the hard facts–EXCEPT Connecticut’s economy has shrunk virtually every year since 2008, measured in terms of real (inflation adjusted) output. All those jobs that we saw created during the Malloy administration were, on average, of lower quality (wages) than those we were losing in non-durable manufacturing (which collapsed) and in insurance & finance (which shrank significantly). Yes, Connecticut is in better shape than many allege in terms of tax burdens, public sector employees, and unfunded liabilities–BUT its economic performance has been miserable, the worst of any state in the nation over the last decade, and in stark contrast with job creation and growth in real output in our neighboring states–MA, NY, and RI have recovered all the jobs lost and added thousands more; all have fully recovered in terms of real output and then some. The NYC and Boston metros are booming. What we need to be discussing is why has Connecticut performed so poorly in terms of economic growth–at least part of the reason is Connecticut didn’t think it important to invest in IT infrastructure, and remains in some ways an IT black hole in the northeast. But neither the Executive nor the Legislature have been giving serious thought to why we did so poorly in the last decade and how to bend the curve. We are in fact in better shape than many understand–but it is the future path that is critical. Right now, we aren’t on the path we need to be on.

    1. Thank you, Dr. Carstensen. I believe the Executive and Legislative branches have no interest in understanding the dynamics of economic growth. Their sole focus is maintaining union control of jobs, wages and wage increases. To the severe detriment of the state’s livelihood.

  5. Sean,

    I remember Tom Selleck in Mr. Baseball rattle off a statistic that he had the most triples after 5 innings with two outs. I may have not gotten the quote right, but you get the point.

    I helped move companies into Connecticut in the 1980’s. Honda in Windsor Locks for example. At that time I saw the industrial base eroding. People did not understand why. Sean, you do not understand why?

    For example, why is Hartford named Hartford? Or why does it exist in its geographical location? Unless you can answer that question, you have little understanding of the state. (FYI. Hooker’s scout was a man named Hart. He was sent ahead to find a place to “ford” the Connecticut River. So when they asked Hooker’s people where they were headed, they responded “Hart’s ford”.) Now does the Mayor of Hartford know that? I doubt it. Do you understand that every tidal river (Connecticut means “long tidal river) forms a natural sandbar inland which limits the ability of ocean going vessels to travel inland and is a natural ford? It is at these fords where many US cities were founded.

    So why are the Insurance Companies in Connecticut? (CT was an ancient primeval forest). Why did manufacturing blossom in this state? (Shipwrights, winter and water). What was the driving economic force in early colonial times? (PS it was the slave trade). Why did Samuel Colt come to Hartford? (Had to do with a river). Why did we lose a ton of manufacturing jobs? (Blame Steve and the Wizard of Woz!). Can any of your great economists answer these questions? And they pretend to understand what is happening here? If any civic group is interested in answers to these questions, I give free lectures.

    The State of Connecticut cannot pay its bills pure and simple. And like any dying bureaucracy (See Inside Bureaucracy by Anthony Downs), it keeps repeating the same patterns which lead it to its demise.

    Bridgeport and Hartford are consistently ranked as some of the worst cities to live in the US. This is a direct result of our racist zoning laws and home rule that allows our suburbs to dump the poor into the central district.

    Taxes? People move out of Connecticut as they cannot afford the taxes.

    And the most telling statistic of all, we are losing our children. All those bright young kids. Ask your neighbors where they are. Mine are in NYC and Virginia. They never even considered living in their home state.

    So blame the Republicans. Or Blame the Democrats. It does not matter. It is the inability of our elected representatives to face reality that has left us in the present condition.

    This is the natural cycle of nature. Only in death can the institutions be reorganized. Only in death can there be rebirth. Our kids are leaving, our jobs are leaving, our companies are leaving. I am afraid Connecticut will go bankrupt. Only then will we be willing to face the real problems.

    And those big companies. They appear to have smart economists. They figured out the ship is sinking. And why sail a battered boat in a troubled sea when there are new ships available in friendly harbors?

    1. We welcome your comments but please note that our guidelines require that comments be limited to 1,000 characters. We will not be able to approve comments that exceed that limit going forward.

      1. 1,000 characters is a silly policy. This is not social media – we want open, honest and deep respectful debate. Respectfully please review the 1,000 word policy, it’s not a good one.

      2. Justin, we appreciate your feedback. Real dialogue is absolutely critical, but the comments section is no place for thinkpieces or diatribes. All commenters with more than 1,000 characters worth of thoughts are encouraged to submit them as an op-ed for our Viewpoints section, which can be done here: https://ctmirror.org/submit-to-viewpoints/

    2. While thoroughly depressing, brilliantly written and correct. Our politicians are refusing to make the most difficult choices and the private sector is left with only a few choices.

  6. Mr. Goldrick makes a reasonable case but he fails to mention one factor: Our children do not want to live here. Young people who get jobs in the public sector remain, but everyone else is bolting. Hartford, New Haven, Bridgeport, south Norwalk and Stamford should be magnets for young people. But high taxes, high housing costs and a lack of jobs keeps them away.

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