Connecticut was a manufacturing state, which became a finance hub, which is now bleeding both manufacturing and finance, as bankers have moved to New York or shut down their operations in the wake of the Great Recession. The fastest-growing job opportunities are mostly for low-wage workers in health care, leisure, and retail, whose income and sales taxes cannot fund the state’s expensive promises to teachers and pensioners. Connecticut is losing rich companies (and their tax revenues) while it’s adding low-wage workers, like personal-care aides and retail salespeople. Yet it remains a high-tax state. That’s a recipe for a budget crisis.
In the biggest picture, Connecticut is a victim of two huge trends—first, the revitalization of America’s great rich cities and second, the long-term rise of hot, cheap suburbs. But Connecticut’s cities are not rich or great; its weather is not hot year-round; and its cost-of-living is not low. The state once benefited from the migration of corporations and their employees from grim and dangerous nearby metros, but now that wave is receding. To get rich, Connecticut offered a leafy haven where America’s titans of finance could move. To stay rich, it will have to build cities where middle-class Americans actually want to stay.