GDP Numbers Highlight State’s Economic Struggles
Connecticut still has troubling economic growth issues as the 2015 annual GDP numbers clearly illustrate.
The latest statistics from the U.S. Bureau of Economic Analysis show Connecticut’s economy grew by just 0.6% last year, well behind the regional and national averages.
Connecticut’s post-recession economic recovery has constantly trailed the region and the country, with a low point of -0.9% in 2011 and a high of 1.2% in 2014.
New England’s economy grew by 1.3% in 2015, with Massachusetts the leader among the six states with 2% growth.
Rhode Island posted 1.1% GDP growth, followed by New Hampshire (0.8%), Connecticut, Maine (0.4%), and Vermont (0.2%).
Nationally, the economy grew by 2.4% in 2015, after growing 2.2% the previous year.
California and Oregon both posted 4.1% growth rates in 2015 to lead all states. Texas (3.8%), Colorado (3.6%), and Montana filled out the top five states.
North Dakota’s economy performed the worst of all states, shrinking 2.1 %, followed by Alaska (-0.5%), West Virginia (0.1%), Kansas (0.2%), and Vermont.
Our sub par economic recovery is also reflected by the pace of job growth in the state, which has the highest unemployment in New England.
In the six-plus years since the end of the recession, Connecticut has recovered just 79% of the 119,100 jobs lost during the economic downturn.
Over the same period, Massachusetts has recovered an incredible 255% of lost jobs while the U.S. has regained 163%.
This is an election year and Connecticut voters are growing increasingly concerned with the state’s economic struggles.
In the latest Quinnipiac University Poll released earlier this month, an all-time high 72% of voters said they were dissatisfied with the state’s direction.
With all General Assembly seats up for grabs, incumbents and challengers can expect to have frank discussions with voters about setting a new course.
And 65% of voters, another record high, disapprove of the way the state legislature is handling its job.
They also made it very clear what the priorities should be for elected officials, with over a third saying the economy and jobs were the most important problem facing the state.
With all General Assembly seats up for grabs this fall, incumbents and challengers can expect to have frank discussions with voters about setting a new course for the state.
We've seen the two biggest tax increases in the state's history over the last five years, fueling a cycle of deficits followed by tax hikes followed by deficits.
State lawmakers got through this legislative session without raising taxes again.
However, with billion dollar-plus deficits forecast for 2017 and 2018, real structural reforms--not more tax hikes--are sorely needed if we're going to bring government spending under control and develop a positive climate for growth.
Voters will be insisting that candidates for legislative office explain their plans for getting the state's fiscal house in order.
And they'll expect real commitments for doing just that.
Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.
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