Connecticut may be known to most Americans as a land full of wealthy suburban financiers and overpriced prep schools, but those stereotypes represent only one pocket of the population. With a recent and disturbing trend of large corporations and individuals leaving Connecticut, many residents and policymakers are left wondering how a state facing a massive budget deficit and a shrinking population can turn things around.

Connecticut’s population has declined for the third year in a row, estimates from the U.S. Census Bureau show.

And the challenges don’t look to be slowing down. Connecticut’s population fell by an estimated 14,000 from 2015 to 2016. With the latest fiscal year ending in $22.7 million in debt, operation in its fourth month without an approved budget and the looming threat of continued corporate flight, the state appears destined for a further population drop.

Last year, after 40 years in Connecticut, General Electric left Fairfield for major tax incentives in Boston, taking hundreds of jobs with it. Now, health insurance giant Aetna is leaving too, and relocating to New York City. Which does little to assure potential residents that America’s wealthiest per-capita state is an enviable marketplace.

At present, population loss is a Northeast problem.

Connecticut needs a major face-lift to attract talented young workers who can sustain long-term business and population, says Shana Schlossberg, CEO and founder of the Connecticut-based startup incubator Upward Hartford. “Aetna said it left because there was no talent in Connecticut,” she says. “I don’t think that’s true. But right now, people don’t walk outside and say, ‘OK, this is an exciting place to be.’”

One of eight states that saw population decreases last year, Connecticut was the third worst behind Illinois and West Virginia. If the state budget continues to falter, even more corporations and big financial firms might choose to flee. In a state where 30 percent of the last decade’s tax revenue was paid by millionaires — 7.3 percent of the population — that could have devastating consequences. “Most of our state’s high-end earners already have very volatile incomes,” says UConn Stamford economics professor Paul Duch, referring to workers within the finance industry. “They pay the most taxes, but we’ve seen a dropoff over the last few years. That will only continue to negatively affect the budget.”

The situation may seem bleak, but there’s hope. At present, population loss is a Northeast problem: Connecticut and Vermont have both lost residents over the past five years, while Massachusetts, New York, New Jersey, Pennsylvania, Maine and Rhode Island all grew by less than 1 percent. “Our young population of workers is growing healthily,” Schlossberg says, noting that the ratio of workers in their 20s has increased from 12.5 percent to 13.1 percent over the past five years. “We have exceptional schools in our state — people are lining up to hire our graduates. … The key is convincing those graduates to start a life in our cities.”

But with New York and Boston nearby, recruiting the best and the brightest can be near impossible. Big banks, financial firms and major manufacturing companies offer stable careers, but little in the way of innovation exists in Connecticut. “This thought process that you can only succeed in a big city is putting secondary cities in a detrimental position,” says Schlossberg. “The more startups we have [in Connecticut], the more opportunity exists for workers to grow a network here. We have to develop an ecosystem for talented people to gather, to foster community.”

“Many of our cities got stuck in the 1980s,” she continues. “With the creation of a startup environment, we’ll be able to move into the 21st century, fast.”

Hopefully, by then Connecticut will have an operating budget.