During many social gatherings in Connecticut these days, there is a likelihood that at some point the conversation will turn to: outrageously-high property taxes, falling real estate prices, and moving out of the state. Why is there such an exodus from this formerly successful and wealthy state?
According to locals, below are some of the commonly mentioned reasons (in no particular order):
- State politicians spend too much buying votes and hiring people – growing state and local staff 6 times faster than the population.
- Foreign immigrants are overwhelming the state’s budget, reducing money for counties and townships. So property taxes have continued to ratchet upward (Norfolk alone went up 14.5%).
- Hedge funds, who had moved their trading desks from Wall Street to Connecticut, all left when CT started specifically targeting them with high tax increases.
- Large insurers have left the state to find a more business-friendly climate.
- Increasing gun control laws drove out their most well-known manufacturers, Remington and Colt, plus several smaller firearms manufacturers.
- Otis Elevator and Carrier Air Conditioning moved their headquarters from CT to FL.
- GE moved its headquarters out of CT to Boston.
What Connecticut is facing today:
- Worst economic growth in the country.
- Huge state budget deficits.
- Underfunded state government pensions.
- Among the worst business climates in the country for number of taxes and their high rates.
- The highest gasoline tax in New England.
- Even the average cable bill has a $12 tax.
- The worst probate court system in the country, incentivizing retirees to leave.
- Net emigration from the state for the last 5 years, and it is increasing.
- Many of the ritzy homes in Greenwich are for sale as wealthy residents flee to TX and FL with no income tax and far lower property taxes. But no wealthy are moving in to purchase real estate, so expensive real estate lies empty and languishes on the market.
Similar discussions about “moving to another state” due to “how horrible the government is here” are also commonplace in Chicago, San Francisco, and Seattle. It is best to continually evaluate state and local governments on how they affect your career and personal finances before these predictable cascades occur.