In just two years, Connecticut households have suffered an alarming drop in the asset basis of many of its citizens, according to a national group that promotes earning opportunities for lower-income families.
From an “A” grade two years ago, Connecticut received a “C” on a biannual “assets and opportunities scorecard” published this month by CFED, a Washington, D.C. organization whose initials stand for Corporation for Enterprise Development.
Unlike studies that track income, the CFED study measures overall wealth across a number of assets, including securities, home and vehicle ownership, education, business equity, and health care coverage. The CFED study also assesses the impact of state tax policy.
The report does not include the impact of recent home foreclosures. According to a report in mid-December by the Boston-based Warren Group, more than 150 homes in Fairfield County were undergoing bank seizures, among 500 in Connecticut as a whole.
Rewind to 2005, when Connecticut trailed only Massachusetts nationally for the fiscal foundation supporting individual families. While Massachusetts maintained its lofty grade, Connecticut plunged to 24th nationally.
A companion report released by New Haven-based Connecticut Voices for Children (CVC) indicated the state was downgraded in part due to new criteria that focus on ethnic and gender disparities; the median white household in Connecticut is 27 times wealthier than its minority counterpart.
“Connecticut is home to people who earn some of the highest salaries in the country, yet a large number of families are a paycheck away from financial disaster,” said Joachim Hero, a CVC research associate who co-wrote the organization”™s tandem report. “Connecticut”™s image is of a state of great prosperity, yet a closer look shows that wealth, security and opportunity are not broadly shared.”
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At 43 percent, minority home ownership trails the 75 percent rate among white residents.
CVC said fewer residents received health insurance from employers in the periods studied, though the state still ranks fourth nationally just behind New Jersey.
While Connecticut has the third-highest average credit card debt in the nation at $2,100, the state also has the fifth-highest median income at $117,000, though that is down from the $128,000 figure cited in the previous CFED report.
At $152,000 on average, Connecticut citizens bear the 10th-highest mortgage debt in the nation. CFED found that 13 percent of mortgages in the state were of the subprime variety that feature sharply escalating interest rates. Federal officials announced several initiatives in December to mitigate subprime loans that are about to reset to higher interest rates.
For the first time this year, the CFED study included data from TransUnion on debt levels for credit cards, mortgages, and installment payments on other big-ticket items like automobiles.
Also new were indexes that measure states”™ policies to help citizens build assets.
Despite Connecticut”™s overall prosperity, the study portrays an alarming drop in household asset “quality” since 2005, due to escalating debt, declining home ownership and expensive health insurance.
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