The election for governor is one thing, but what in the world is the new man going to do in office once he gets there? Four observers chime in.
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Putting Yankee Ingenuity Back to Work
By Heath W. Fahle
One by one, many of the mills and factories that drove Connecticut’s economic engine over the past two centuries have fallen silent as industry migrated to lower-cost locations around the world. This evolution and its fallout have posed a series of challenges to statewide policymakers that haven’t yet been confronted effectively. After six years of a caretaker administration, Connecticut’s next governor must lead an effort to transform our economic environment for the new era.
As the state’s manufacturing base has eroded, poverty rates have increased to the extent that Connecticut has some of the nation’s richest families and too many of its poorest. From 1990 to 2009, Connecticut was one of just a handful of states to have negative job growth over that 20-year period. Connecticut’s relatively high costs of production have sent employers and the jobs they create to other states or overseas.
Many governors come to power promising to create jobs. But the reality is that policymakers—even governors—can’t create many jobs. Their real charge is to cultivate an economic landscape that is conducive to job growth. In Connecticut, that environment is hindered by a tax burden that drives irresponsible state spending, high electricity rates, and a legislature that is dominated by special-interest groups whose policies discourage economic growth.
Since 1975, median income in Connecticut has risen nearly 50 percent in inflation-adjusted dollars, while state expenditures have more than quadrupled during that same timeframe. State government spending has gotten so far out of control that the state spends more on debt-service payments in one month than on the annual operating expenses of the Department of Labor or the Department of Environmental Protection. On top of all this, overspending mixed with a lousy economy has produced a $3.4 billion budget deficit that must be tackled. In sum, the situation is a recipe for an even higher tax burden that no employer is eager to help shoulder. Reducing expenditures and state- employee concessions must be coupled with last year’s tax hikes to rein in spending and balance the budget.
Connecticut’s electricity rates are the highest in the continental United States, making life difficult for residents and businesses alike. Like many densely populated states, our policymakers have decided against coal-based power. But without a commitment to another form of energy, like nuclear power, Connecticut’s energy prices have risen and consumers have paid the price.
Underlying some of these issues, Connecticut’s General Assembly is dominated by special-interest groups whose agenda is hostile to economic development in the state. Labor unions have a long and valuable history in Connecticut and serve an important function in balancing the rights of workers against the interests of management. But Big Labor’s iron grip on the legislature is out of balance with Connecticut’s need for job growth.
According to the Connecticut AFL-CIO’s Legislative Scorecard for ’07-’08 (the most recent available), for example, 77 House Democrats voted for Big Labor’s pet projects 100 percent of the time. By comparison, only three House Republicans were above 50 percent. A majority of the majority is too closely aligned with these special-interest groups. Restoring balance at the State Capitol must be a top priority for the next governor.
Any one of these challenges, considered individually, is daunting, to say the least. Together, they represent a task of gargantuan proportions for Connecticut’s 73rd governor. Accomplishing these tasks will serve as a blueprint for other states while returning Connecticut to its rightful place at the forefront of the global economy.
Heath W. Fahle is the policy director of the Yankee Institute for Public Policy, based in Hartford. For more information, visit yankeeinstitute.org.