Waterbury, Conn., once famous for the manufacture of brass products, clocks and watches. But as with all of the state’s cities, most manufacturing has departed, taking a lot of well-paying blue-collar jobs with it. The train station’s Italianate tower is at the left.
From Robert Whitcomb’s “Digital Diary,’’ in GoLocal24.com
David Lehman (perhaps unfortunately a former Goldman Sachs partner) has some interesting ideas about how to boost still rich Connecticut’s economy and, particularly, how to lift its troubled cities. Gov. Ned Lamont, a Democrat, has named Mr. Lehman to be commissioner of the Nutmeg State’s Department of Economic and Community Development. He may have some lessons for Rhode Island and Massachusetts.
Some of his ideas are predictable, such as improving commuter rail service and the roads, more and closer partnerships with colleges and universities and boosting job-training for growing occupations, such as health care, software and engineering.
But what has jumped out is that instead of handing out tax breaks and other financial incentives to get companies to move to, or expand in, the Nutmeg State, he’d have the state hand out these goodies only after they created well-paid jobs. Bloomberg News noted that would be a gamble in the current relentless arms race among states and localities to lure jobs. But Connecticut, with its location between the two thriving (at the moment) economic powerhouses of New York and Boston, might be better placed than most states to succeed with this new strategy.
Mr. Lehman also wants to encourage a resurgence of the state’s cities, which, with exceptions in some parts of them (e.g., the area around Yale in New Haven) are in poor shape. He wants policies that would double the populations of its cities -- which now range from 100,000 and 150,000 -- over a 25-year period. He told Bloomberg: “We’ve got the suburban and rural thing covered.’’ New economic growth will be “in these higher density transit-oriented developments.” Note that as in Massachusetts (and a lesser extent in Rhode Island) the growing emphasis is on using mass transit to maintain and spur prosperity.
Back when I lived in Connecticut, in the ‘60s, its cities still had large and stable middle-class populations, in large part because of a still thriving industrial sector. Mr. Lehman will be a hero if he can bring the middle class back to these places.
Meanwhile, the rhetoric continues about masses of millionaires said to be fleeing Connecticut and other high-tax states to move to Florida. Of course, some people do move because of taxes but the phenomenon is exaggerated (I know a bunch of these folks.) As this commentary from the left-leaning Institute on Taxation and Economic Policy notes:
“most millionaires are married, are more likely to have children, and are economically and socially tied to where they made their money. {In Connecticut’s case many in nearby Manhattan} They benefit from where they are living because they have ‘home field advantage’: they know the area, have connections, and most are ‘working rich’ and moving could actually set them back in their career and productivity. There is a reason they chose to live there in the first place, whether that be career opportunities, the education and public services offered, or overall quality of life. By the time they are making enough to think about moving to save on their taxes they are already deeply embedded into their communities and living comfortably enough that the state tax savings at stake would not fundamentally change their quality of life even if they somehow did find a way to continue earning a very large income in a new locale.’’
“The people who do tend to move most frequently are young college graduates and the lowest income residents looking for higher pay and a better quality of life, and state tax rates are not central in these groups’ decision making.’’
Of more interest to me is what the long-term impact of all these people moving to Florida will be on the Sunshine State’s taxes. Will a growing demand for services lead it to impose an income tax to pay for them? And what will be the effect of rising seas from global warming on property values (and property-tax collections) there?
To read more about Mr. Lehman’s plans, please hit this Bloomberg link.
To read more about high-end tax refugees, please hit this link.
