My wife and I come from Connecticut, by way of Illinois and West Virginia.
What do Connecticut, Illinois and West Virginia all have in common? They are three of only four states in the country where the population is declining, where people are moving out. They are three very blue states, with high taxes and repressive, anti-business governments.
Why bring this up? Connecticut made the news this week with the announcement that General Electric is leaving the state and moving its headquarters to Boston. That’s a body blow. GE, a beacon of American business, has been a major employer in Fairfield County for 42 years.
Why is it leaving Connecticut? Taxes, of course. The insatiable state government – Democrats and Republicans alike – has raised corporate taxes for years and recently tacked on a 20% corporate surtax. GE took a huge hit last year, its fifth tax increase since 2011. It finally said enough’s enough.
The fact that GE is moving to Massachusetts (we used to call it Taxachusetts) says something in itself. But the commonwealth has the lowest taxes in the northeast outside of New Hampshire. And the Boston area offers, besides urban delights, an expanding and technically savvy workforce.
Where does that leave Connecticut? On the skids. Since 2010 it has recorded zero GDP growth. Only Louisiana and Maine have fared worse. Its corporate tax rate is now 9% and its top income tax rate is 7% -- this on top of federal taxes. The Tax Foundation says Connecticut’s business climate is ranked 44th in the country. (Florida’s is ranked fifth.) And according to the Wall Street Journal, Connecticut’s state pensions are only 48% funded, third worst in the country. The state is a financial disaster.
I take no joy is seeing Connecticut go down the tubes. I lived there with my family for 30 years. My former employer, Pfizer, still has a presence there. My daughter and her family live there now. In fact, her children go to Fairfield County schools. (With GE leaving, her taxes will probably go up – again.) I have a granddaughter enrolled at the University of Connecticut, where my older son got his dental degree some years ago. Our family has strong ties with the state.
And Connecticut has a lot going for it. It’s a beautiful state, with a hilly interior and a long coastline. There are few better places for weekend sailing. New York City is a manageable drive away, as is Boston. And it has the wonderful UConn women’s basketball team, the best on this or any other planet.
Yet it’s hemorrhaging businesses, and people are leaving in droves. The sad truth is that Connecticut is a case history on how to screw things up, on how to choke off business and mismanage an economy.
The GE exodus should be a lesson for Florida: Keep taxes low and regulations lower. A good business climate means growth and prosperity. A bad one means, well, going the way of Connecticut.