Spring 2010 issue of The Connecticut Economy examines the state budget and local property markets

With jobs disappearing, unemployment growing and Connecticut facing an ongoing budget nightmare—in an election year no less—the Spring 2010 issue of The Connecticut Economy: A University of Connecticut Quarterly Review analyzes the state’s grim budget prospects, and examines the economic consequences of local policies—including zoning controls, taxes, spending and regional cooperation—that affect property values and the housing mix.

The latest issue examines the state’s economy and finds plenty to still raise concerns: high unemployment, slow job growth, and red-ink budgets at all levels of government. With education claiming a large portion of public spending, especially at the town level, “A Forward Look” by John Yrchik, Executive Director of the Connecticut Education Association (CEA), argues that Governor M. Jodi Rell’s use of federal stimulus money will disadvantage K-12 education when the extra funding runs out. Yrchik spoke and responded to media questions when editors of The Connecticut Economy presented their findings at a March 10th press release event at the Hartford offices of the CEA.

Connecticut has resorted to borrowing, one-shot fixes, and tinkering to balance its budgets; but those days will end in July 2011, contends Quarterly co-editor Arthur Wright in an analysis of the state’s enduring budget saga. That’s when Connecticut’s budget for the next biennium, FY2012-FY2013, begins. Whether the state’s political leaders cut the deficit via higher taxes or reduced spending, the challenge will be to choose the best combination, says Wright, adding: “Better as a state, and as individual voters, we begin facing such issues this year, with so many elections for State offices going on.”

There is little question that Connecticut is an old state and growing older. The 39.4 median age of the state’s population ranks it the 7th oldest state in the nation. So, if Connecticut hopes to replace its aging, retirement-bound baby-boomers with a cadre of younger workers, it has to import them with a mix of challenging jobs, good pay and affordable housing, notes Quarterly Executive Editor Steven Lanza. Yet, like towns all across America, Connecticut communities have long used zoning controls to regulate the pace, mix and location of development. Lanza examines whether zoning works at cross-purposes with broader public policy objectives such as attracting young professionals to a rapidly graying state.

To shed light on how local policies affect real property values, recent UConn PhD Ekaterina Gnedenko (Agricultural & Resource Economics) and co-editor Dennis Heffley apply an “open-city” model to examine how local public policies—including municipal taxes, spending, zoning and regional cooperation—affect property values. The model’s underlying assumption—that town officials seek to maximize local property values—is a controversial one. But they note that “…if property values reflect not just a town’s site and socioeconomic conditions, but also ‘how the town is run’—then public officials who seek to enhance property values may be serving the interests of their constituents well.”

The editors and Quarterly contributors also:

  • Map the change in percent of available land used for development purposes between 1985 and 2006 across Connecticut’s 169 towns, based on satellite images.
  • Provide a region-by-region look at Connecticut’s economic performance, analyzing jobs, unemployment, housing prices and permits for the state’s four largest market areas.
  • Use tables, charts and commentary to report labor market data for Connecticut, showing higher unemployment rates across the board.
  • Forecast deeper job losses than previously estimated, but the start of recovery during 2010 and 2011.

For free access to this and other issues of The Connecticut Economy, visit: http://cteconomy.uconn.edu/.