Connecticut’s Economy in Crisis - The Cost to Homeowners

Connecticut’s Economy in Crisis - The Cost to Homeowners

Connecticut is in crisis. Our economy has been stagnant, while our economic outlook going forward stands at 40th in the nation. We are ranked 49 out of 50 states as a place to do business. We have the second highest property taxes in the country and higher business and personal taxes than 44 other states. We have the most underfunded pension system in the nation—more than $127.7 billion in liabilities, a staggering $35,721 of debt per person, the second highest per capita debt in the nation. Established companies continue to flee the state taking revenue and jobs with them.

But those statistics don’t tell the personal toll our economic crisis is having on our families.

According to news reports, Connecticut home prices are still struggling to recover from the last recession. In fact, Connecticut’s Housing Price Index saw the lowest growth in the nation between 2012 and 2017, according to a review of figures from the Federal Housing Finance Agency.

Connecticut’s Housing Price Index (HPI) grew 5.5 percent over the course of five years, far lower than the national average of 30 percent and well below other states in the Northeast. Massachusetts grew by 27 percent, while New York grew by 15 percent.

According to Michael Barbaro President and CEO of Connecticut REALTORS, Connecticut’s housing market is “defying the laws of economics.” “We have low inventory and flat prices. Normally, with low inventory we should have high prices.”

Barbaro believes that many people who purchased homes before the housing market crash and recession of 2008 may still be underwater on their mortgages and can’t afford to get out from under their current houses.

Economically, Connecticut has been one of the slowest states in the nation to recover from the economic shock of the 2008 recession. The state has yet to recover all the jobs lost during that time and personal income growth is far below the national average. Concurrently, the state has seen a pronounced loss of residents to other states in the last three to five years.

Donald Klepper-Smith, former economic adviser to Gov. M. Jodi Rell and chief economist for DataCore Partners, LLC, said; “The health of the local labor markets and local housing market go hand and hand in the long run. "Meaning traction in the local jobs picture often translates into increased demand for housing and rising home values."

Connecticut is one of the few states losing population, according to a number of U.S. Census Bureau reports and the annual National Movers Study. Numbers from the Internal Revenue Service showed that in 2015 the largest group of individuals leaving the state earned over $200,000 annually, all of which puts a strain on home values.

We need new thinking and effective action to stop this death spiral.

Here is my 5 Point Economic Action Plan that I will implement as governor of Connecticut:

  1. Restore the right to work, by denying labor unions the right to extract forced dues
  2. Expand the training wage, to encourage employers to hire entry-level workers who require training or otherwise lack the skills needed for conventional positions
  3. Reduce unproductive and unnecessary occupational licensing which does not improve safety but makes it more difficult for businesses and professionals to operate
  4. Eliminate unproductive taxes, 200 or more in Connecticut which generate less than 2% in total state revenue
  5. Embrace the sharing economy, by encouraging new business forms and practices

With your help, we can work together to restore growth and opportunity in Connecticut. Will you join me?

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