Submitted by Carl Higbie
As America tries to get back to work, life and a routine, densely packed cities are faced with a harsh reality; do people really need or want to live there anymore. The COVID jolt has forced many companies to conduct business remotely. While “work from home” technology has been progressing rapidly over the last decade, corporations have hesitated to make this a mainstream option for employees. This has kept cities in a constant state of growth for both residents and businesses. The forced experiment of remote work has yielded far better results than many employers anticipated. According to the Airtasker study, telecommuters “worked 1.4 more days every month, or 16.8 more days every year” than people who worked in an office. So why would anyone want to pay a million dollars for a 500 square foot apartment if they were not tied to a physical work location in a place like New York City?
The answer; many won’t. I believe that by the end of 2021 New York city will lose over a million residents. In kind, many companies are already planning their exit from expensive 50th floor leases for community on demand and home office structures. In this rapid societal shift, we have accepted remote work ability. This virus scared a lot of people, so much so that a house on my street was rented for $37,000 a month by city refugees. This is more than 4 times the previous rate. The fears are justified, New York City alone to date has had almost 200,000 cases while the entire states of California, Texas and Florida combined have had less than 150,000.
So where will people go? I pose this question to our liberal Governor, Ned Lamont. As we have seen for years now, people are fleeing high tax blue states like New York for business friendly, low tax red states like Florida and Texas. But coming out of the lockdown, many people will want to maintain some relative proximities to the financial hub of Manhattan. Ned Lamont has a unique opportunity to rebuild the failing state of CT and it could be a national model…if the Democratically dominated state is willing to concede some of their policies that have been driving 8,000 families a year out of the state.
Compared to New York state, Connecticut property taxes are low, income tax is two points lower, but they are still high enough to be driving the high earning population out… Fact. So let’s change it. CT has been trying to tax its way out of financial decline, a practice that has failed EVERY single time historically. CT and FL are a simple case study with definitive results.
Red states that have lowered taxes are raising revenues based on the influx of companies, jobs and residents. States that are raising taxes are losing these same commodities.
I will wager my farm (in northern CT) on the success of three changes; 1) Drop, cut, eliminate the income tax tomorrow. 2) Affirm that towns will keep property taxes as low as they are in Greenwich. 3) Let CT join the other 22 states with Right to work laws. If implemented, I guarantee this time next year CT will be the epicenter of growth north of the Mason Dixon line.
Here is the counter argument. We will have a gap of revenue for potentially a year. This is the time it will take companies to move and establish a workforce here. But this timeline to attract business is drastically accelerated based on the post COVID conditions, so we should seize this opportunity to catch the exodus from Manhattan before they set their roots elsewhere.
Connecticut is uniquely positioned to be a destination for the tristate market. We know what works and what does not. Let’s do it!