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Sticking to the Knitting
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Business New Haven
9/22/1997
By: BNH
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Over the past few years Connecticut's economy has enjoyed modest but steady growth. Unemployment figures are down significantly; income and tax receipts are up.
However, as we've reported in the past, this good news obscures other bad news, including continuing problems of under-employment, low growth rates in the core of the state and the intractability of urban decay. Perhaps as important is evidence of a return by many of Connecticut's business and community leaders to some of the bad habits of the recent past.
As we enter a new political season we're hearing little about business competitiveness, tax relief or efforts to build Connecticut's economy in a broad-based way. What we are hearing about is a flood of project-oriented development proposals - each of which, will somehow be the next Engine of Growth.
In New Haven, for example, much focus has been on Tweed-New Haven Airport, and now a $50 million taxpayer effort to fund biotech development. In Hartford, we're hearing about a new perishable-foods facility at Bradley Airport as well as significant government assistance for the location of a Six Flags amusement park on land owned by Pratt & Whitney.
More taxpayer millions are also being proposed and indeed already spent (some would say wasted) to develop another tourist trap, a science center in East Hartford. It joins the several million dollars of state funds that were flushed down the drain on a similar venture in New London called Ocean Quest.
The perishable foods facility, like Tweed “expansion” and the development of a New Haven biomedical park, are all projects with the potential to build the state's economy and may be worth the taxpayer dollars proponents seek. The problem is that by moving the focus of business development toward major projects, business leaders such as those leading the Hartford Millennium project (originators of the Bradley plan) or the Regional Growth Partnership (proponents of the technology efforts and Tweed expansion) have strayed from traditional advocacy of sound fiscal policy and cost-reduction for all Connecticut businesses.
It's hard to imagine that legislators or a public being asked by private concerns to fund roller-coasters, frozen-food lockers, football stadia or commuter airports will be willing, for example, to reduce the taxes that all business pay. Neither, with the above efforts receiving such high-profile advocacy will the public support the necessary efforts to restructure costs to make Connecticut companies more competitive. And yes, Virginia, that remains the most important tool to building a solid foundation for wealth creation and quality job growth in Connecticut.
The recent release of an index put together with the input of five of Connecticut's leading economists to track key manufacturing indicators underscores this point. According to the Manufacturing Alliance of Connecticut (MAC), the state ranks 43rd in the nation in its hospitality to manufacturing companies. MAC's index measured elements such as electrical costs, health care, wages, taxes, property costs, etc.
Connecticut's economy was in large part built by manufacturing companies. Even today, 17 percent of all Connecticut workers still toil in this sector. But where will their employers expand? Manufacturing wages here average $44,000, compared to $30,000 for other industries. And despite the exodus of jobs and companies during the first part of the decade, Connecticut remains home to more than 6,000 manufacturers. According to economist Don Klepper-Smith, who created the index, an improvement to 33rd in the U.S. would have resulted in more than 79,000 jobs and $8.9 billion additional business in Connecticut over the past decade.
That's an awful lot of roller coaster rides, Fleetwood Mac tickets, UConn touchdowns, and frozen TV dinners. BNH
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