It is no exaggeration to say that Hamden has experienced, and has experienced for several years, a remarkable outflow of money. The city’s Big List has withered in value faster, compared to other cities, except any city except Naugatuck. Cash balances at the Hamden banks have been steadily declining as depositors move their accounts elsewhere.
From 2010 to 2018, Hamden’s Big List value as a percentage of the state average was at a median of 61.37% of that average (compare, for example, to North Haven’s at 113%, or , to another perspective, West Haven at about 49% In other words, the value of major fixed assets at Hamden, his big list, is failing catastrophically.
Hamden’s wealth polarization, represented by an index called the Gini ratio, has actually worsened since 2006, when it was 0.42 when in 2019 it was 0.43. This ratio measures the polarization of wealth in the hands of the inhabitants, with an index of 0 representing perfectly distributed wealth and an index of 1 indicating all the wealth of the city in the hands of one person. Given the index’s narrow range, it should be alarming that Hamden’s Wealth Distribution equity has actually fallen 2.5% in just a few short years.
Deposits in Hamden banks, a conventional measure of cash flow through the city’s businesses and individuals, as a percentage of total deposits in New Haven-area banks, fell from 5.64% to 4 , 92% from 2014 to mid-2021. Cash, like fixed assets, leaves Hamden and what’s left is concentrated in fewer hands.
The city maintains at its core a set of potential solutions that can attract more business, while spreading the tax impact more evenly and raising more money.
Connecticut cities have limited resources in state law to attract business. This, however, should not serve to limit the imagination of economic leaders as they explore both the contours and the opportunities implied by these state constraints.
Cities, especially Hamden, should consider both pro market and professional company strategies, they plan their growth plans for the future. Most cities only consider business-friendly approaches, usually limited to local tax incentives, and ignore favorable market opportunities that yield longer-term and robust tax results.
Business-friendly economic development strategies tend to favor incumbents and producers and include mundane examples such as conditional tax breaks, start-up loans, and special infrastructure extensions such as sewer connections (in fact , a tax allowance). Pro-market strategies favor new entrants and consumers. These strategies are in no way incompatible with each other.
Hamden’s current economic development strategy manifesto includes more than a dozen potential approaches to attracting business to the city. All but one (tax breaks) are written in abstract language that is perhaps more ambitious than actually achievable. The tax reduction strategy is of course pro-business rather than pro-market. To get a feel for this approach, imagine, for a moment, every Hamden company claiming and receiving a multi-year tax break. The scale of the disaster for the market needs little explanation.
On the contrary, the city could strive to remove barriers to competition through an aggressive expansion of infrastructure such as fiber optic networking, installation of 5G support and creation of a City business mediator who can help level the competitive environment for less well capitalized business prospects.
As a further observation, while the need for non-competitive contracts may be invoked in some requirements, they are among the most insidious forms of business-friendly economic policies that only serve the business to which the work is awarded and do not. do nothing for the market as a whole.
Hamden can get out of the tax trench he dug for decades. While I am not suggesting that such an emergence is simple or without significant investment, I encourage our economic leadership to face the wind and start taking the necessary steps.
Dan Smolnik is a tax lawyer and member of the Hamden Economic Development Commission. All opinions expressed here are solely hers.
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