October 2007

Alfred Mariani

           In the short term, Connecticut will experience modest growth. This is due in large part to the general strength of the U.S. and global economies and the strength of the New York Financial Market.

           However, long term prospects are troubling. Excessive tax rates, particularly property, gasoline and personal property taxes are resulting in a mass exodus of the middle class. A major relocation company stated that Connecticut is the most moved out state in the country (per capita). Many of those who are relocating are 55 years and older. Unfortunately, these transplants are at a stage in their lives where they have positive cashflow and higher levels of disposable income. Since consumer spending drives gross domestic product, we can not afford to lose these residents. In the event of an economic downtime, Connecticut will struggle more so than states with population growth. This is because states with population growth realize related economic growth, which is a by-product of increasing population.