Connecticut”™s economy contracted in 2012. We repeat: in 2012, a year that saw the S&P 500 Index rise 13.4 percent, that saw the U.S. GDP grow nearly 2.5 percent and that saw 49 out of 50 states”™ economies grow, Connecticut”™s did not.
For those who might scoff at Gov. Rick Perry”™s campaign to draw businesses from Connecticut to Texas, take note: According to the U.S. Bureau of Economic Analysis, Connecticut”™s total economic output shrank 0.01 percent last year. On the opposite side of the spectrum was North Dakota, whose economy grew at a ridiculous 13.4 percent rate in 2012. Trailing by a considerable margin, but No. 2 nonetheless, was Texas, whose economic output grew 4.8 percent last year.
Perry may not be the only governor Connecticut should be worried about.
A survey of more than 200 Connecticut manufacturers that was released earlier this month showed widespread discontent with the “state of the state,” as the president of one firm put it.
Of the firms that were surveyed, 52 percent reported being recruited to relocate to or expand within other states, with North Carolina, South Carolina, Virginia, Florida and Georgia the top five recruiters. Half of the firms that were recruited said they considered either leaving Connecticut altogether or expanding elsewhere.
Frank Johnson, president of the Manufacturing Alliance of Connecticut (which commissioned the survey), told the Business Journal that companies are “not happy with the economic conditions here in Connecticut and they”™re not happy with the direction the state is moving in.”
Johnson went on to say that despite the good intentions of many lawmakers to support manufacturing ”” long a foundation of Connecticut”™s economy ”” “There”™s just a prevailing feeling in Connecticut that government is not doing all that it can to try to create a healthy manufacturing environment here.”
Even if there is no mass exodus of manufacturers, Jay Mazur, president of Gordon Rubber & Packing Co. in Derby, suggested that there is little incentive for companies outside of Connecticut to relocate or expand here.
“Connecticut is in a lousy financial state,” Mazur told the Business Journal. “I think you”™re not going to see a whole lot of new entries into Connecticut, given the state of the state. In my opinion, it”™s not a very investment-favorable climate.”
And that, in a nutshell, is why Texas”™ economy grew 4.8 percent in 2012 and why Connecticut”™s shrank: businesses feel comfortable expanding in Texas, while they don”™t feel at ease in the Constitution State.
Looking at our government “leaders,” should that come as a surprise?
On one hand, you”™ve got the state Republican chairman, Jerry Labriola Jr., calling the state budget “a toxic cocktail of over-spending, over-borrowing and new taxes, including a $60 million increase in the gasoline tax.” Top GOP leaders in the General Assembly accused their Democratic counterparts of “deception” when it came to negotiations ”” or lack thereof ”” over the budget.
Democrats, for their part, say there was never a Republican budget proposal, and have refuted claims of “secrecy” when it came to the introduction and votes on the $44 billion spending plan (or $37.6 billion budget, depending on whom you ask).
The dysfunction is not lost on businesses. Connecticut firms are not blind to the fact that efforts to balance the state”™s budget relied in part on the legalization of Keno and mixed martial arts. We are not supposing to judge the moral integrity of either, only commenting on the wisdom of legalizing both solely for the revenue they will deliver to state coffers.
Asked about the decline in economic output, Malloy said, “Is it good news? No, it”™s not good news. … We need to do better.”
Finally, something both Democrats and Republicans can agree on.
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