The state’s budget crisis, and months of fiscal wrangling at the State Capitol, appears to have taken a toll on the economic outlook of Connecticut residents. Despite growing optimism about their personal financial situation, state residents are increasingly pessimistic about the state’s finances and employment prospects, and are preparing to do some personal belt-tightening as a result.
In the latest InformCT Consumer Confidence Survey, for the first quarter of 2016, the percentage who believe that the Connecticut economy is improving has dropped 10 points from the first quarter of 2015 to the first quarter this year, from just over one-third (34%) of state residents to just under one-quarter (24%).
A year ago, when asked about current business conditions in Connecticut versus six months prior, 29 percent said conditions were better and only 22 percent said they were worse. That break-down has now flipped, with 22 percent stating “better” and 29 percent saying business conditions are worse.
A majority of respondents (56%) said they intend to make some (41%), or significant (15%), cuts to their personal budget, as a result of budget cuts at the state level. Only four in ten say that state cuts will have no effect “on me personally.” Asked what the state should do to best remedy the budget shortfall, six in ten (59%) urged the state to reduce spending while four in ten (43%) suggested raising taxes on the top 1% of income households.
The quarterly survey is released by InformCT, a public-private partnership that provides independent, non-partisan research, analysis, and public outreach to help create fact-based dialogue and action in Connecticut. Administered by researchers from the Connecticut Economic Resource Center, Inc. (CERC) and Smith & Company, the analysis is based on the responses of residents across Connecticut and addresses key economic issues, providing a glimpse of the public’s views.
Regarding the employment picture, state residents increasingly believe that although there are jobs available, but 6 in 10 believe there are “not enough.” And 42 percent are concerned that either their job, or their spouse’s job, is in jeopardy – up from 33 percent in the previous quarter, and the highest level the quarterly survey has seen in the past year.
When it comes to their own finances, state residents are markedly more upbeat. One-third (32%) say they are better off than 6 months ago (up from 24% in the previous quarterly survey) and 44 percent believe they will be better off six months from now than they are today, a jump of 10 points from last quarter. More than 8 in 10 residents (83%) say that from a personal financial standpoint, they will be much better off, somewhat better off, or about the same, six months from now.
State residents continue to be persistent in their view that Connecticut is a good place to live and raise a family, with 48 percent expressing that view, and only 29 percent disagreeing – a number that hasn’t budged much during the past year. Yet, the percentage of respondents who say they are likely to move out of the state in the next five years has increased to its highest level in five quarters, to 43 percent, after hovering between 32 percent and 39 percent with that view in the four quarterly surveys of 2015.
Perhaps driven by economic necessity, the public’s view of regionalism – long an anathema in Connecticut – indicates receptivity. Four in ten now believe that services such as public safety, public health, libraries, education and animal control “could effectively be delivered regionally.” And 52 percent believe that the best way to grow the economy is to invest in local schools, transportation choices and walkable areas, versus 48 percent who view recruiting companies to the area as the best way to grow the economy.