🔒State policy will drive CT’s economic future

Connecticut has great economic potential. We saw a glimmer of that in 2018 with year-over-year job growth of over 25,000, and especially strong growth in construction and manufacturing jobs.

But, the state still significantly lags the U.S. and the region in numerous factors of economic performance. Can 2019 be a breakout year?

For the U.S., 2018 was a solid year and 2019 may be great. Despite challenges from tariffs and Fed rate hikes, most factors are decidedly positive. We should see job growth of 200,000 or more per month, oil prices under $70 a barrel, solid GDP numbers and overall stock-market growth despite some bumpiness.

Worldwide, the economy is solid too, helping exports despite tariffs. U.S. tax reform will be kicking in fully not only helping local corporations but setting the stage for more nationwide corporations to purchase Connecticut goods and services.

Connecticut has definite strengths:

Productivity: Some of the most productive workers in many sectors in the U.S.

Good mix of 21st-century businesses: Aerospace, nanotechnology, bioscience, biomedical and high-end financial services.

Manufacturing: Jobs have grown by 4,300 year over year and thousands of open jobs still exist.

Resurgent construction and positive financial-services job growth: Both sectors have grown during the last 12 months.

Solid innovation: Connecticut Business & Industry Association (CBIA) surveys show over half of firms have and will introduce new products or services.

Positive company profit and growth expectations: CBIA surveys have shown their best numbers since 2008.

Indeed, recent CBIA surveys have shown company performance and expectations for growth and profits are all up. Likewise, concern for tax increases, need to cut state spending and manage long-term unfunded liabilities remain major concerns.

Repeatedly, I hear from business people that they may move new production or their entire operations out of state if these latter areas do not improve.

Business sectors that Connecticut is strong in, such as aerospace, defense and financial services, will take advantage of strong U.S. and international markets. This will push the Connecticut economy forward. The real issue for Connecticut is whether our public-policy actions help rather than hinder growth. It all centers upon Connecticut fiscal and regulatory policy. With Ned Lamont as our new governor and the new legislature solidly Democratic it is imperative that the right choices are made.

CT21.org has stated that its reports show upwards of $2 billion can be saved without harming citizens with accelerated prison reform, rebalancing to more home care in long-term care and greater use of not-for-profits in social-services delivery. The Malloy administration over the last two budget cycles demonstrated that deficits can be handled without tax increases. Will policymakers make the right choices?

Many statements were made by Democratic candidates to support regulatory changes that have been vehemently opposed by business. In Washington, whether you love or hate Trump, his initiative to not add new business regulation without sunsetting two regulations rocketed business confidence and led to added investment and new job creation. The proposed Democratic regulatory plan does the opposite.

There is also a lot of concern that the new policymakers may raise taxes or non-tax costs like tolls. Malloy, facing large deficits the last two years, found ways to avoid tax increases. In part, this was done because of real concern that tax hikes would drive wealthy taxpayers and businesses out of the state.

The new administration should seriously talk with Malloy and his budget office before proposing to add taxes to solve the state's fiscal problem.

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