Which state has just about the nation's worst business climate? To judge by a recent Forbes magazine article, we're it.
But Forbes, though accurately reporting some concerns about Connecticut, doesn't take into account recent signs of hope. (The article "How Did Rich Connecticut Morph Into One of America's Worst-Performing Economies?" can be seen at http://onforb.es/13xUELx.)
Both a more comprehensive view and a harder look at state spending are needed.
Among the problems cited by Forbes: At last measure, Connecticut ranked last among the 50 states in annual economic growth; small business has declined here 2.2 percent between 1996 and 2006, while most other states increased; and Gov. Dannel P. Malloy's administration pushed through the biggest tax hike in state history.
What Forbes didn't mention is a June prediction by the Connecticut Business and Industry Association -- not known for ignoring tough economic problems -- that this state is poised to grow in the next three years. Hiring numbers are up, said Pete Gioia, the respected CBIA economist, as is the real estate market.
Despite Forbes' painting Connecticut as a place for businesses to avoid, financiers and hedge fund managers still concentrate in Fairfield County. Sixteen Fortune 500 companies call our state home.
This past May, Chief Executive magazine also gave Connecticut dismal business ratings, ranking the state 45th on its business-friendliness scale. To be fair, it said Connecticut is "trying to hold line on taxes and spending, but solid-blue state lacks growth." Among other problems, CEOs mentioned huge unfunded pension liabilities and other mandated costs. Gov. Malloy has begun paying more into the funds to reduce the liability, but his predecessors have stuck him with a big bill.
There's more to any state's economy than its business climate. In June, the Social Science Research Council ranked Connecticut best in the nation in terms of overall well-being, including income, health and education. The Economist magazine's Human Development Index ranks Connecticut the best of all states. The NBC subsidiary iVillage last year ranked our state the top for women.
Still, Connecticut's financial problems have to be addressed. To begin with, for more than a quarter-century, Connecticut has overspent on state employee pensions and lavish health care benefits, as various governors have courted the union vote with promises that the state, at this pace, won't be able to keep.
Gov. Malloy says he's committed to turning that around. We hope his colleagues in the Democratic-controlled legislature agree.
Reprinted with permission of the Hartford Courant.
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