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Wakeup Call for Connecticut
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Business New Haven
11/6/1995
By: BNH
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Last month the snooze alarm went off in Connecticut. It remains to be seen whether those in government and business actually will wake up, in spite of the blare.
Several reports confirm that Connecticut's economy is stagnant, and the most recent assessment from the New England Economic Project indicates that the prospect for job growth in the state is bleak, at best. According to the report's author, Edward J. Deak, chairman of the economics department at Fairfield University, the state will not come close to replacing the 156,000 jobs that were lost between 1989 and 1993 before the end of the century. That report's estimate was revised downward from a slightly more optimistic prognosis just five months ago.
The report shows that the Connecticut economy is in transition, and while some companies are adding jobs, they are not compensating for those lost elsewhere.
This dismal outlook comes in spite of a robust national and New England economy. Without job growth in Connecticut, there can be little business or consumer confidence, and the spiral will continue downward. So far there has been marginal public reaction to the new reports, as the governor's and legislature's attention remain riveted to the Bridgeport casino question. No doubt the issue of casino jobs will loom larger in light of the disturbing news.
We see the following devastating effects (by no means a complete list) of a continued no- or low-growth economy. We hope you agree they can't be tolerated:
n Small and mid-sized businesses as well as middle class residents will accelerate their exodus from New Haven and others cities.
n Regional banks will increase the flow of capital out of Connecticut.
n Real small-business growth will all but disappear.
n Businesses with Connecticut-only markets will consolidate at an increasing level.
n Housing sales and home prices will remain soft.
n Successful organizations and institutions will be faced with a greater share of civic responsibility and governmental costs.
n Governmental budgets and the state's education system will come under increasing stress.
Some in government believe that better management is enough to turn around the problems of the cities and the state. Others see a solution in regionalism for everything but spoilt milk. We wonder, however, if the time has come to look beyond incremental changes, enhanced economic development efforts and bids to transfer stagnant wealth and come to terms with Connecticut's role in the new global economy.
We believe that both Gov. John G. Rowland and New Haven Mayor John DeStefano Jr. have made sincere efforts to tackle the problems of state and city. However, these efforts are insufficient to deal with a prolonged no-growth economy.
Can we break the trend? We believe we can - with a sense of urgency. Urgency to radically reduce the cost of government, deregulate electric utilities, increase small-business lending, reduce business taxes and bring business back to the cities.
We think a regional and statewide economic summit could help identify for Connecticut residents and business owners both the solutions as well the political and business leadership that can and are willing to build Connecticut - and not just drain it dry.
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