Though state government expects some good fiscal news today in the form of surging income tax receipts, Gov. Dannel P. Malloy has warned officials to temper their expectations.
And a recent analysis by The Pew Charitable Trusts supports the argument for caution, showing Connecticut has been lagging the nation in personal income growth since the last recession. And most recently that meager growth has been slowing down.
The analysis found personal income has grown nationally by 1.6 percent annually — adjusted for inflation — between 2007 and the second quarter of 2017. And in Connecticut growth has been just 0.6 percent annually over that period.
“Trends in personal income matter not only for individuals and families but also for state governments, because tax revenue and spending demands may rise or fall along with residents’ incomes,” Pew analysts wrote. “Comprising far more than simply employees’ wages, the measure sums up all sorts of income received by state residents, such as earnings from owning a business or investing, as well as benefits provided by employers or the government.”
“Lingering weakness” in the farming industry was a big factor behind the modest national growth, according to Pew. But other factors more prominent in Connecticut — falling earnings in construction, management and information services and a declining government sector — also stymied growth.
Personal income growth here wasn’t just poor over the past decade.
During the last fiscal year, Connecticut’s…