Connecticut residents have spoken clearly: the cost of living is the top issue facing the state.
According to the University of New Hampshire’s Survey Center, 26% of respondents in the Feb. 24 Nutmeg State Poll cited “cost of living” as Connecticut’s primary problem. That far outpaced concerns about taxes (14%), housing (9%), jobs and the economy (9%), and immigration (8%).
Concern about affordability has grown significantly. In May 2025, only 19% of respondents identified cost of living as the top issue. Taxes, which previously ranked first at 21%, now sit second. But these issues are closely intertwined.
Affordability concerns cut across political and ideological lines and are particularly pronounced among younger residents (ages 18-34) and seniors (65 and older). That pattern is not surprising.
Young adults continue to leave Connecticut for major metropolitan areas offering stronger job markets and lower costs. Meanwhile, older residents frequently relocate to states with warmer climates and more favorable tax structures. Connecticut consistently ranks among the least favorable states for retirees.
Overall, the state continues to experience weak in-migration and sustained out-migration — a trend decades in the making. While Connecticut’s population has seen modest stabilization in recent years, much of that growth has been driven by international immigration rather than domestic relocation.
Migration trends are not disconnected from affordability. They are a direct reflection of it.
Connecticut’s tax and regulatory environment plays a central role in driving the cost of living. With a shrinking or stagnant tax base, those who remain shoulder an increasingly heavy burden. On a per capita basis, Connecticut collects nearly $10,000 annually in combined state and local taxes. For more than a decade, the Constitution State has had one of the worst tax climates in the country, ranking 49th overall in property taxes.
Gov. Ned Lamont recently acknowledged the need to grow Connecticut’s “economic pie,” noting “shrinking grand lists and shrinking schools” drive up costs in local budgets and, ultimately, property taxes.
But growing the pie requires understanding why people and businesses leave in the first place.
Connecticut consistently ranks among the least favorable states for business. A January Wallethub report placed the state 47th overall, citing high labor costs, limited industry diversity, workforce shortages, and constrained commercial space. Combined with one of the highest corporate tax rates in the country, these factors create barriers to investment.
As the Tax Foundation notes, higher business taxes directly increase “the cost of making investments in capital, like machinery and equipment, which businesses and workers use to be more productive.” When job growth stalls, income growth stagnates. And when incomes lag behind rising costs, affordability suffers.
Energy costs add another layer of pressure. Connecticut residents pay among the highest energy rates in the nation, in part due to policy-driven charges such as the Public Benefits Charge embedded in utility bills. Meanwhile, the state continues to carry one of the highest per capita pension debt burdens in the country, placing ongoing pressure on budgets.
Government policy does not exist in isolation. Higher taxes and expanded regulation ripple through everyday expenses — from housing and groceries to utilities and services. Labor mandates influence construction costs. Energy mandates affect monthly bills. Regulatory complexity slows economic growth. These outcomes are not inevitable. They are the result of policy decisions.
To its credit, the General Assembly’s adoption of fiscal guardrails in 2017 improved the state’s fiscal trajectory. Stabilized budgets and disciplined spending have strengthened Connecticut’s financial position. But progress does not eliminate structural challenges.
Proposals introduced this session — including taxes on capital gains, income, and property, along with expanded regulatory mandates — risk moving the state in the opposite direction. They conflict with the stated goal of attracting new taxpayers rather than creating new taxes. Lawmakers are correct to focus on affordability. But cost of living and taxes are intrinsically linked. Sustainable relief requires structural reform — not short-term rebates or temporary credits that carry long-term financial tradeoffs.
Connecticut’s affordability challenge demands a comprehensive reassessment of the state’s tax structure and regulatory environment. Encouraging investment, expanding job opportunities, and broadening the tax base can strengthen both household finances and state budgets.
Bipartisan cooperation made fiscal reform possible in 2017. Similar cooperation is necessary now.
Connecticut’s affordability crisis is not fate. It is the product of choices — and it can be addressed through different choices.
If lawmakers want to lower the cost of living, they must confront the tax and regulatory structures driving it. Lasting reform, not temporary relief, will determine whether residents choose to stay — or leave.
