Economy of Connecticut

The total gross state product for Connecticut for 2012 was $229.3 billion, up from $225.4 billion in 2011.[1]

Connecticut state welcome sign in Enfield, Connecticut

Connecticut's per capita personal income in 2013 was estimated at $60,847, the highest of any state.[2] There is, however, a great disparity in incomes throughout the state; after New York, Connecticut had the second largest gap nationwide between the average incomes of the top 1% and the average incomes of the bottom 99%.[3] According to a 2013 study by Phoenix Marketing International, Connecticut had the third-largest number of millionaires per capita in the United States, with a ratio of 7.32%.[4] New Canaan is the wealthiest town in Connecticut, with a per capita income of $85,459. Darien, Greenwich, Weston, Westport and Wilton also have per capita incomes over $65,000. Hartford is the poorest municipality in Connecticut, with a per capita income of $13,428 in 2000.[5]

Entering the Merritt Parkway from New York in Greenwich, Connecticut

The state's seasonally adjusted unemployment rate in September 2019 was 3.6%, the 30th highest in the nation.[6]

Taxation

Before 1991, Connecticut had an investment-only income tax system. Income from employment was untaxed, but income from investments was taxed at 13%, the highest rate in the U.S., with no deductions allowed for costs of producing the investment income, such as interest on borrowing.

In 1991, under Governor Lowell P. Weicker Jr., an independent, the system was changed to one in which the taxes on employment income and investment income were equalized at a maximum rate of 4%. The new tax policy drew investment firms to Connecticut; as of 2014, Fairfield County was home to the headquarters for 14 of the 200 largest hedge funds in the world.[7]

As of 2014, the income tax rates on Connecticut individuals are divided into six tax brackets of 3% (on income up to $10,000); 5% ($10,000-$50,000); 5.5% ($50,000-$100,000); 6% ($100,000-$200,000); 6.5% ($200,000-$250,000); and 6.7% (more than $250,000), with additional amounts owed depending on the bracket.[8]

All wages of Connecticut residents are subject to the state's income tax, even if earned outside the state. However, in those cases, Connecticut income tax must be withheld only to the extent the Connecticut tax exceeds the amount withheld by the other jurisdiction. Since New York and Massachusetts have higher tax rates than Connecticut, this effectively means that Connecticut residents that work in those states have no Connecticut income tax withheld. Connecticut permits a credit for taxes paid to other jurisdictions, but since residents who work in other states are still subject to Connecticut income taxation, they may owe taxes if the jurisdictional credit does not fully offset the Connecticut tax amount.

Connecticut levies a 6.35% state sales tax on the retail sale, lease, or rental of most goods.[9] Some items and services in general are not subject to sales and use taxes unless specifically enumerated as taxable by statute. A provision excluding clothing under $50 from sales tax was repealed as of July 1, 2011.[9] There are no additional sales taxes imposed by local jurisdictions. In August 2013, Connecticut authorized a sales tax "holiday" for one week during which retailers did not have to remit sales tax on certain items and quantities of clothing.[10]

All real and personal property located within the state of Connecticut is taxable unless specifically exempted by statute. All assessments are at 70% of fair market value. Another 20% of the value may be taxed by the local government though. The maximum property tax credit is $300 per return and any excess may not be refunded or carried forward.[11] Connecticut does not levy an intangible personal property tax. According to the Tax Foundation, the 2010 Census data shows Connecticut residents paying the 2nd highest average property taxes in the nation with only New Jersey ahead of them.[12]

The Tax Foundation determined Connecticut residents had the third highest burden in the nation for state and local taxes at 11.86%, or $7,150, compared to the national average of 9.8%.[13]

As of 2014, the gasoline tax in Connecticut is 49.3 cents per gallon (the third highest in the nation) and the diesel tax is 54.9 cents per gallon (the highest in the nation).[14]

Real estate

Of home-sale transactions that closed in March 2014, the median home in Connecticut sold for $225,000, up 3.2% from March 2013.[15] Connecticut ranked ninth nationally in foreclosure activity as of April 2014, with one of every 887 residential units involved in a foreclosure proceeding, or 0.11% of the total housing stock.,[16] including City Place I and the Traveler's Tower, both housing the major insurance industry.

Industries
See also: List of Connecticut companies

Finance and insurance is Connecticut's largest industry, according to the U.S. Census Bureau, generating 16.4% of gross domestic product (GDP) in 2009. Major financial industry employers include The Hartford, Travelers, Cigna, Aetna, Mass Mutual, People's United Financial,[17] Royal Bank of Scotland,[18] UBS[19] Bridgewater Associates,[20] and GE Capital. Separately, the real estate industry accounted for an additional 15% of economic activity in 2009, with major employers including Realogy[21] and William Raveis Real Estate.[22]

Hartford Skyline

Manufacturing is the third biggest industry at 11.9% of GDP and dominated by Hartford-based United Technologies Corporation (UTC), which employs more than 22,000 people in Connecticut.[23] Lockheed Martin subsidiary Sikorsky Aircraft operates Connecticut's single largest manufacturing plant in Stratford,[22] where it makes helicopters. Other UTC divisions include UTC Propulsion and Aerospace Systems, including jet engine manufacturer Pratt & Whitney and UTC Building and Industrial Systems.[24]

Other major manufacturers include the Electric Boat division of General Dynamics, which makes submarines in Groton,[25] and Boehringer Ingelheim, a pharmaceuticals manufacturer with its U.S. headquarters in Ridgefield.[22]

Connecticut historically was a center of gun manufacturing, and four gun-manufacturing firms continued to operate in the state as of December 2012, employing 2,000 people: Colt, Stag, Ruger, and Mossberg.[26] Marlin, owned by Remington, closed in April 2011.[27]

A report issued by the Connecticut Commission on Culture & Tourism on December 7, 2006 demonstrated that the areas of the arts, film, history, and tourism generated more than $14 billion in economic activity and 170,000 jobs annually. This provides $9 billion in personal income for Connecticut residents and $1.7 billion in state and local revenue.[28] The Foxwoods Resort Casino and Mohegan Sun casino number among the state's largest employers;[29] both are located on Indian reservations in the eastern part of Connecticut.

Connecticut's agricultural sector employed about 12,000 people as of 2010, with more than a quarter of that number involved in nursery stock production. Other agricultural products include dairy products and eggs, tobacco, fish and shellfish, and fruit.[30]

Oyster harvesting was historically an important source of income to towns along the Connecticut coastline. In the 19th century, oystering boomed in New Haven, Bridgeport, and Norwalk and achieved modest success in neighboring towns.

In 1911, Connecticut's oyster production reached its peak at nearly 25 million pounds of oyster meats. This was, at the time, higher than production in New York, Rhode Island, or Massachusetts.[31] During this time, the Connecticut coast was known in the shellfishing industry as the oyster capital of the world. From before World War 1 until 1969, Connecticut laws restricted the right to harvest oysters in state-owned beds to sailing vessels. These laws prompted the construction of the oyster sloop style vessel that lasted well into the 20th century.[32] The sloop Hope is believed to be the last oyster sloop built in Connecticut, completed in Greenwich in 1948.

References
  1. "Total Gross Domestic Product by State for Connecticut". Federal Reserve Bank of St. Louis. January 1997. Retrieved May 15, 2014.
  2. "State Personal Income 2013" (PDF) (Press release). Bureau of Economic Analysis, U.S. Department of Commerce. March 25, 2014. Archived from the original (PDF) on April 13, 2014. Retrieved May 15, 2014.
  3. Sommeiller, Estelle; Price, Mark (February 19, 2014). The Increasingly Unequal States of America: Income Inequality by State, 1917 to 2011 (Report). The Economic Policy Institute.
  4. Frank, Robert. "Top states for millionaires per capita". CNBC. Retrieved January 22, 2014.
  5. Connecticut per capita income, median household income, and median family income at State, County and Town level: Census 2000 data (XLS) (Report). State of Connecticut. Retrieved July 25, 2010.
  6. "Local Area Unemployment Statistics". U.S. Bureau of Labor Statistics. Retrieved October 23, 2019.
  7. "Top 200 Hedge Fund Managers" (PDF). Hedge Fund Alert.
  8. "Connecticut Income Tax Brackets". Tax-Brackets.org. 2015. Retrieved October 24, 2015.
  9. "Summary of Tax Provisions Contained in 2011 Conn. Pub. Acts 6". Department of Revenue Services. State of Connecticut. June 10, 2011. Retrieved July 6, 2011.
  10. Phillips Erb, Kelly (July 17, 2013). "Get Ready To Shop: State Sales Tax Holidays Are Back!". Forbes. Retrieved May 16, 2014.
  11. "2014 CT-1040 Connecticut Resident Income Tax Return and Instructions" (PDF). Department of Revenue Services. State of Connecticut. p. 31. Retrieved October 24, 2015.
  12. Christie, Les (September 30, 2010). "Highest Property Taxes in the Country". CNN Money. New York. Retrieved September 30, 2010.
  13. "Connecticut: The Facts on Connecticut's Tax Climate". The Tax Foundation. Retrieved May 16, 2014.
  14. Hess, Alexander E.M.; Frohlich, Thomas C. (January 20, 2015). "States with the highest (and lowest) gas taxes". USA Today. Retrieved October 24, 2015.
  15. "Connecticut Single-Family Home Sales Post Modest Increase in March". Boston: The Warren Group. May 8, 2014. Retrieved May 16, 2014.
  16. "U.S. Foreclosure Activity Decreases 1% in April Despite 1% Increase in Bank Repossessions". Irvine, California: RealtyTrac. May 15, 2014. Archived from the original on May 17, 2014. Retrieved May 16, 2014.
  17. "Search Results for the 100 largest employers in Connecticut". Labor Market Information. Connecticut Department of Labor. March 17, 2015. Retrieved October 25, 2015.
  18. Varnon, Rob (January 12, 2012). "RBS' 4,800 job cuts might only scratch Stamford operation". Connecticut Post. Retrieved May 16, 2014.
  19. Varnon, Rob (May 6, 2013). "Stamford could gain from UBS exit of New York space". Connecticut Post. Retrieved May 16, 2014.
  20. "Bridgewater Associates is the world's largest hedge fund firm for the fourth straight year says Institutional Investor's Alpha". EIN News. May 16, 2014. Archived from the original on May 17, 2014. Retrieved May 28, 2014.
  21. "Gov. Malloy: Global Leader in Corporate Relocation Management Services to Expand and Grow Jobs in Danbury". Realogy. April 17, 2014. Archived from the original on May 29, 2014. Retrieved May 16, 2014.
  22. "Employer List – Search Results: Raveis". Labor Market Information. Connecticut Department of Labor. March 17, 2015. Archived from the original on September 5, 2009. Retrieved October 25, 2015.
  23. Dowling, Brian; Gosselin, Kenneth R. (February 26, 2014). "Tax Breaks Encourage United Technologies To Stay in State". Hartford Courant. Retrieved May 16, 2014.
  24. "Our Businesses". United Technologies Corp. Retrieved May 16, 2014.
  25. "EB History". General Dynamics Electric Boat. Retrieved May 16, 2014.
  26. Rivera, Ray; Cowan, Alison Leigh (December 23, 2012). "Gun Makers Use Home Leverage in Connecticut". The New York Times. Retrieved December 24, 2012.
  27. Sturdevant, Matthew (April 1, 2011). "Marlin Firearms Closes in North Haven, Ending 141 Years of Manufacturing in Connecticut". Hartford Courant.
  28. Culture & Tourism: The Economic Impact of the Arts, Film, History, and Tourism Industries in Connecticut (Highlights) (PDF) (Report). Commission on Culture and Tourism.
  29. "Search Results for the 25 largest employers in Connecticut". Labor Market Information. Connecticut Department of Labor. March 17, 2015. Retrieved May 16, 2014.
  30. Lopez, Rigoberto A.; et al. (September 2010). Economic Impacts of Connecticut's Agricultural Industry (PDF) (Report). Department of Agricultural and Resource Economics, University of Connecticut and Connecticut Center for Economic Analysis. Retrieved May 16, 2014.
  31. "Oystering in Connecticut, from Colonial Times to the 21st century". Connecticut History. Retrieved October 25, 2015.
  32. Andersen, Tom (2004) [2002]. This Fine Piece of Water: An Environmental History of Long Island Sound (revised ed.). Yale University Press. p. 90. ISBN 978-0-3001-0287-1.
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