HARTFORD, CT —Stemming population loss, fixing the state’s deteriorating highways and tackling the multi-billion dollar issue of the teacher’s retirement system were the top issues a panel of experts listed Friday as ways to right Connecticut’s fiscal ship.
The panelists spoke at the Connecticut Business and Industry Association / MetroHartford Alliance Economic Summit + Outlook 2019 conference at the downtown Hartford Marriott attended by hundreds of businesspeople and politicians.
The panel was moderated by David Griggs, president and CEO of the MetroHartford Alliance. The panelists included Peter Gioia, chief economist of PGEcon.com; Emily Mandel, an economist for Moody’s Analytics; Manisha Srivastava, a budget specialist for the state Office of Policy & Management; and Susan Coleman, professor of finance at the University of Hartford.
Mandel stated the obvious: “Connecticut clearly has had a slower recovery than the rest of the country.”
She said: “Connecticut has really struggled with financial services and population losses.” Those population losses, she went on, are mostly younger people.
The result, Mandel said, “Is Connecticut’s population is older which is hurting the housing market.”
She said as a comparison, one of the other states she tracks in her job is Colorado “and young people are flocking to that state.”
“Younger and middle age people bring more wealth,” she told the audience. She added that Colorado has also seen a boom in international immigration.
Gioia picked up on that theme, stating people need to understand that there is a big difference between illegal immigrants and legal immigration.
“This area of the country benefits enormously from skilled immigration from around the world,” Gioia said. “We need to encourage students who come here to study to stay here.”
Briggs, Srivastava and Gioia all said they have been encouraged, in recent months, by the number of start-up companies that have come to call to Connecticut home.
Briggs specifically mentioned Infosys, a global leader in consulting, technology and next-generation services, which recently opened its next technology and innovation hub in Hartford, and plans to have 1,000 workers in the state by 2022.
But Gioia added a warning that while it’s good that Hartford, New Haven and other cities are attracting start-up companies to come to Connecticut that: “Let’s make sure we have the kind of policies in place that keep them here” years down the road.
He said the danger is the start-ups will eventually find bigger cities such as New York, Boston or Raleigh more attractive if Connecticut doesn’t continue to make itself a business friendly environment.
Predictability in the state budget was also a recurring theme mentioned both by the panel and other speakers during morning session.
Srivastava said one of the issues that Governor-elect Ned Lamont and the new legislature will face is tackling the Teacher’s Retirement Fund.
The annual contribution to the Teachers’ Retirement System is about $1.3 billion, but it could top $3.25 billion to $6.2 billion by 2032, depending on different experts, because of years of underfunding. Connecticut didn’t start setting aside money to pay for teachers’ retirements until around 1982.
Outgoing Gov. Dannel P. Malloy tried to shift some of the costs of the program to the towns but was unsuccessful in the last legislature.
Srivastava said perhaps Lamont and the new legislature can try the approach with the teachers that worked with state workers — namely lengthening the payment period for the unfunded liabilities over a longer period of time or explore an option suggested by State Treasurer Denise Nappier to issue lottery-backed revenue bonds sufficient to generate cash proceeds of approximately $1.5 billion for deposit into the Teachers’ Retirement Fund.
Of course no discussion about fixing Connecticut’s struggling economy could go without some conversation about the state’s roads and highways — and tolls.
Gioia said nothing would help Connecticut businesses — and the Connecticut economy — more than “finding a way to get to New York City quicker.”
“We need to get the roads unclogged,” he said, adding if the highways weren’t worked, “We’re looking at another Mianus River in the next 10 years.”
The Mianus River bridge over I-95 in Greenwich collapsed in 1983, killing three motorists.
Asked by an audience member whether he was in favor of tolls, Gioia said he was, but only on interstates 91 and 84.
He said, “If you boosted travel speeds significantly, once that’s done people wouldn’t mind paying a modest toll” to keep traffic moving. He said over time he believes people would prefer that than being continually stuck in bumper-to-bumper traffic.
Moody’s Mandel agreed with Gioia, stating she thought the recent Hartford-to-New Haven additional train line was a good first step.
She said while Connecticut has made some baby steps in improving the business climate over the past year, “it’s not Boston, it’s not New York.”
“Increasing travel speed” for commuters would be a big key in attracting businesses and new workers, Mandel said.