Graying Population Means Declining Tax Base
Fast becoming one of the oldest states in the U.S., Connecticut will pay for its increasing democgraphic maturity with a decrease in the number of working people, a lower median income and a smaller tax base producing less state revenue.
That’s according to a new study from the University of Connecticut, which reported that in 2010, Connecticut will have the ninth-highest percentage of people age 65 or older. The study was conducted to help state policymakers anticipate what issues lie ahead for the state.
Baby boomers retiring
With more baby boomers reaching retirement age, said Charles Venator-Santiago, one of the study’s authors, “Public policy-makers can anticipate a decrease in the personal income tax base and an increase in demand for services.”
Within 20 years there will be 60,000 fewer workers paying taxes in the state, and the jobs that will still be here won’t be as high-paying.
“We’re replacing jobs [that have] high-paying wages and good benefits with low-paying services jobs,” said Orlando Rodriguez, the study’s other author.
Affects budget projections
All of this is troubling news for state lawmakers, who are already struggling to craft a new two-year state budget during a deep recession. It means that revenue projections going forward will have to be closely scrutinized.
Although Connecticut had the nation’s second-highest median income in 2000, it slipped to third-highest in 2005 and is likely to be in fourth place when new data are released later this year.
“This study points out more than ever that policymakers need to make decisions that will encourage high quality, job-creating investments to come into, or increase, within Connecticut,” said CBIA economist Pete Gioia.
For more information about the study, contact Gioia at 860-244-1945 or email@example.com.
EXPLORE BY CATEGORY
Stay Connected with CBIA News Digests
The latest news and information delivered directly to your inbox.