Looks like we’re in a steady pattern of perfect storms these days, with hurricanes, snow deluges and stirrings of another potential Nor'Easter.
It’s the same in the world of state and federal finances.
Lawmakers in the nation’s capital are racing to find a way to avoid the “fiscal cliff” that’s getting closer every day. President Obama, however, is poised to open budget talks by placing trillions in new taxes on corporations and wealthier citizens—i.e., America’s job creators--on the table
In Hartford, the state’s budget director says a yawning state budget deficit now projected at $365 million may necessitate a mandatory deficit-reduction plan—two years after a record-high state tax hike.
Now, the news is worse: Officials are projecting a $1.1 billion gap in the fiscal year that will start on July 1.
“Batten down the hatches!” is a cry that works for our meteorological and fiscal situations.
The state of jobs
Meanwhile, somehow slightly overlooked in these fiscal talks is the state of our employment in Connecticut over the past year and a half.
From January of 2011 to September of 2012, employment in Connecticut grew just a nudge, by 0.46%, which places us a distant 41st in job growth in the U.S over that time.
Few states are worse than we are in job creation, but there are plenty of competitors well ahead of us--including Massachusetts at #30, North Carolina at #29, New Jersey at #22, South Carolina at #14, and New York at #13. (Figures courtesy Don Klepper-Smith of DataCore Partners.)
"On both the federal and state levels, job creation needs to be Job No. 1," says Pete Gioia, CBIA vice president and economist. "To do this, state and federal fiscal houses need to be put in order to restore business confidence and stimulate private-sector investment."
The familiar adage is “feed a cold and starve a fever.” If we were to consider that Connecticut has a “jobs cold,” we've done a little to feed the patient over the past year and a half, but lots more to “stoke the fever”—of higher taxes and fees.
Fixing Connecticut should mean doing everything we can to bring state spending under control, streamlining how state government works, and addressing our mountainous long-term obligations.
Doing that will start the turnaround we need—in employer confidence, job growth, and yes, ultimately, the revenues that come with a healthier, growing economy.
We will have much more on recommendations from the state’s business community on how to achieve those goals.