Yash Roy, Contributing Photographer

For much of Connecticut’s political and business establishment, General Electric’s 2017 decision to move its 42-year headquarters out of the state was like the canary in the coal mine. 

So when Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management, convened an economic conference with the state’s top economic and business leaders soon after GE’s announcement, the attendees could only agree on one thing: Connecticut’s economic outlook was “bleak.”

Last Wednesday, Sonnenfeld convened the same conference with many of the same attendees, including Governor Ned Lamont, New Haven Mayor Justin Elicker, the mayors of other major Connecticut cities and the CEOs of many large companies based in Connecticut. For this group of business and political establishment figures, the qualms that many of them had voiced five years ago were gone. 

While attendees acknowledged that COVID-19 had created its own set of workforce, labor, housing and affordability issues, they collectively agreed that the state’s physical, online and business infrastructure had improved in recent years.  

“When you look back five years you have to ask the question: are we better off than we were five years ago? I think that the answer is unequivocally yes — we are far better off — far better off fiscally, better off economically, and I think we’re better off psychologically as well,” James Smith, CEO of financial consulting service JCSmithAdvisors and state economic advisor, told attendees. 

According to Sonnenfeld, the general mood of the room five years ago was pessimistic, with attendees reflecting the growing consensus that the state’s government and economy was simply not working for its residents. 

Ineffective state governance, large deficits and pension liabilities, a lack of economic vision and a dearth of investment were preventing the state from transitioning into a modern economy that could compete with similarly sized states across the U.S.,  he said.

“For much of the U.S.’s history, Connecticut has occupied an important spot as a crossroads in the largest economic corridor of the nation,” Sonnenfeld said at the conference last week. “The leadership of GE and other companies painted a dark picture on lack of investment and trust in leadership across the state five years ago. Thankfully, the report and recommendations we issued have been followed and we’re starting to see real change.” 

Sonnenfeld and AdvanceCT, an economic development organization created in 1993 and rebranded in 2018 to increase business in the state, presented a slate of welcoming economic information for the state. 

Since Lamont’s inauguration in 2019, the state has created a $3 billion reserve fund and turned an approximately $5 billion budget deficit into a $4 billion surplus. Still, Sonnenfeld said, the state still has close to $40 billion in unfunded liabilities like pensions. 

Connecticut’s percentage change in debt levels has fallen from roughly 7.5 percent between 2014 and 2017 to 2.3 percent between 2018 and 2021. Credit rating agency Moody’s Corporation recently upgraded the state’s debt rating for the first time in 20 years. 

“We’re beginning to rebuild confidence in our state,” Lamont said. “I’ve always believed that one of our largest assets is our highly skilled workforce, and we’ve been able to build on this to right the state’s economic ship.” 

The state has also seen an increase in bioscience, technology, advanced manufacturing, and financial technology, totalling to approximately $100 billion in gross state product and 200,000 new jobs. Gross state product levels have been 10 percent higher than their pre-pandemic levels, with business creation also up 40 percent. Sonnenfeld attributed the growth to streamlined and digitized business permit applications as well as the consolidation of agencies responsible for business oversight. 

Companies with long histories in Connecticut — including Sikorsky, Pratt & Whitney, Linde, Pfizer and PepsiCo — have increased investment in the state by roughly $25 billion since 2018, creating 10,000 more jobs. 

One growth sector heralded by Sonnenfeld and the conference’s attendees was aviation. Connecticut is now responsible for roughly a quarter of all aviation engine and parts manufacturing in the nation, with Lockheed Martin expanding business in the state. Lamont and Sonnenfeld also celebrated both the Tweed New Haven Airport and Bradley International Airport, where Avelo and Breeze airlines have expanded routes and coverage in the last two years. 

While much of the news that Sonnenfeld and other state leaders had to share was positive, they also acknowledged some statistics that are still worrying for the state. 

Bob Patricelli, co-chair of the former Commission on Fiscal Stability and Economic Growth in Connecticut, warned attendees about the state’s $95 billion in unfunded liabilities while also noting that the state is at the bottom of many competitiveness and business climate indices. 

Elicker and Hartford Mayor Luke Bronin put persistent affordable housing issues front and center during their conference remarks.

“We talk a lot about needing more housing,” Elicker told attendees. “But we need to do more. The state needs to take action to ensure that Connecticut isn’t a state where all the rich people live in one place and all the poor people in another.” 

Elicker also spoke directly to developers on the Gold Coast of Connecticut, which has been historically criticized for exclusionary housing, including Greg Schwartz, fintech startup founder, former Zillow executive and New Canaan resident. 

As part of the Gold Coast, Schwartz’s development previously raised $84,000 to fight the building of 31 affordable housing units in New Canaan. 

“We’re not bad people,” Schwartz said about the New Canaan development. ​“I promise. We’re feeling bullied. When people feel bullied, they fight back. You make no progress.” 

Schwartz argued that both sides in the affordable-housing debate need to find common ground.

“If we don’t bully you,” Elicker responded, “I don’t see how we can have any real movement on affordable housing. Cities can’t do this alone.” 

Schwartz also called for radical solutions to the housing crisis, including the building of more high-rise buildings in the state to accommodate housing. 

Previous conferences have helped influence the allocation of state funds, and helped decide the trajectory of the 2018 gubernatorial election. Lamont was a sponsor of the 2017 conference and utilized many of its recommendations for his economic platform, with some of them becoming realized after he was elected.  

The next gubernatorial election will take place on Nov. 8 with incumbent Democratic Governor Ned Lamont facing off against Republican challenger Bob Stefanowski.