Hartford Business Journal

10 Hartford Business Journal • June 8, 2015 www.HartfordBusiness.com UConn's biz school bursting at seams By Gregory Seay gseay@HartfordBusiness.com U Conn is two years away from relocat- ing its West Hartford campus to Hart- ford, yet an expansion of its nascent downtown campus already has begun. UConn last week bought the office building at 38 Prospect St. that is home to JCJ Architecture for $3.9 million. After an unspecified sum to refit the building to its needs, UConn will relocate its downtown Hartford satellite for its School of Business there well ahead of the fall 2017 arrival of the relocated West Hart- ford campus to the former Hartford Times building a half-block away, officials said. The School of Social Work, too, will have a branch inside 38 Prospect. The relocation is much needed, said business school Dean John A. Elliott. The business-school satellite has been housed in about 50,000 square feet on four floors of 100 Constitution Plaza since 2004. At least 800 full- and part-time MBA and executive MBA pupils are enrolled in a half dozen degree programs offered at the downtown branch. "We've been growing and growing rap- idly,'' Elliott said. Early into planning for UConn's new downtown campus, it was clear that not all of the state flagship's post-graduate departments and programming would fit into the Hartford Times site, Elliott said. Buying and refitting 38 Prospect ensures more elbow room for both the new Hartford campus and for the growing ranks of post-graduate business school enrollees, he said. "It's largely an efficiency argument,'' the dean said of the move's rationale. Staying in its 100 Constitution digs was an option, Elliott said, given its proximity to the heart of downtown, home to several major insurance companies as well as local and regional offices for Connecticut, New England and U.S.-based legal, accounting, consulting, financial, and other business- support firms. Colleen McGuire, who directs the busi- ness school's MBA program, said she regu- larly meets with downtown companies and businesses, pitching UConn's ability to partner with them for customized training programs for their workers. McGuire is also on the lookout, she said, for prospective enrollees into the college's traditional MBA and cohort-led instructional programs, as well as ideas for making them more rel- evant to modern-day business needs. It costs roughly $800 per credit hour to complete UConn's required 50-credit traditional MBA program. "It's a great value,'' McGuire said com- pared to more expensive MBA programs like Harvard, which today can run to more than $100,000. Elliott said the new space at 38 Pros- pect will likely include a pair of tiered lec- ture halls, plus the requisite computers and other technology that enhance the teaching and learning experience. n from page 1 surcharge that was supposed to sunset two years ago, higher sales taxes on computer services, and an increase in the hospital provider tax. All that came despite last-minute pleas from the state's largest employers — General Electric, Aetna, and Travelers — not to significantly raise taxes in a state already considered one of the most costly to do business in. Business lobbyists, too, urged lawmakers for months to reject major tax hikes. The business community didn't seem to be a top priority when Malloy and the legislature considered a budget that touches every business and resident in the state, said Andrew Markowski, Connecticut state direc- tor for the National Fed- eration of Independent Business (NFIB). Markowski said two main reasons exist for business's lack of prior- ity status at the State Capitol: Most legislators don't understand how businesses operate; and the legislature, instead of budgeting based on projected revenue with- out tax increases, develops a spending plan first and then figures out ways to raise enough money to pay for it. "Connecticut state government has an insatiable appe- tite for state spending," Markowski said. "The only way they can satiate that appetite is by finding more revenue, and there are only a few places they can get more revenue." Democrat reasoning For their part, Malloy and the General Assembly's Democratic leadership didn't feel as if the state budget de-prioritized the business community, noting the spend- ing plan has positives for companies. House Speaker Brendan Sharkey (D-Hamden) said legis- lators resisted proposals during the session to cut research and development tax credits for businesses. They also didn't expand the sales tax on professional services, which would have impacted an estimated 20,000 companies ranging from dry cleaners and accountants to engineers and architects. Sharkey said a large focus of the budget is to generate funding for Malloy's 30-year, $100 billion overhaul of the state's transportation system, something the business community has requested for years. The spending plan also includes a $436 million increase in municipal aid, which will help cities and towns reduce their property tax burden on land and vehicles. "Let's be very clear. Businesses, residents, and the Connecticut economy lose billions — billions — of dol- lars of output each year because our transportation infra- structure needs a transformation," said Malloy spokes- man Devon Puglia. "The historic investments we're making, the largest in the history of Connecticut — an additional $10 billion over five years — are good for job creation, good for the economy, and good for businesses." The final budget approved by the legislature did set up a funding mechanism for increased transportation spending in the future by dedicating a portion of sales tax receipts to a special transportation fund. However, the $436 million set to be collected for that fund over the next two years is mostly offset by the legislature's deci- sion to withhold $371 million in general fund money typi- cally earmarked for transportation. Malloy, who still needs to sign the budget before it becomes law, late last week did leave open the possibil- ity that the business taxes could be tweaked. A brief impact Despite not getting much of what it wanted in the bud- get, the business community did have a brief impact on the negotiations. After GE, Aetna, and Travel- ers openly voiced their displea- sure — including suggesting they might relocate elsewhere — over several tax proposals, some moderate Democrats hesitated and delayed the bud- get vote by a day. "The effort put out by CBIA was nothing short of phenom- enal, and I have been very critical of the CBIA in the past for refusing to make waves," said Senate Minority Leader Len Fasano (R-North Haven). "They mobilized, got informa- tion to businesses, and those businesses got in here to talk about this impact." Despite that one-day reprieve, however, the business lobby was not happy with the final outcome of a budget that includes continuing the 20 percent corporate tax surcharge when it was supposed to sunset two years ago, raising $82 million by further limiting the amount of tax credits compa- nies can take, and generating $26 million in new taxes from parking facilities and car washes, Brennan said. "It may have been a little better than the original, but it is still pretty bad," Brennan said. The business lobby's inability to get its message across and the legislature's unwillingness to listen has created a state that has the highest unemployment rate (6.3 per- cent) in New England, Brennan said. Meantime, the state has only recovered 78 percent of the jobs lost during the Great Recession, compared to 130 percent nationally and 150 percent in Massachusetts, said Brennan. "It is just the makeup of the legislative body," Bren- nan said. "There are people who don't fully under- stand the importance of creating a business-friendly environment." The General Assembly needs a structural change not only in how it listens but how it acts, said Markowski. It can't keep shaping its tax policies around a pre-determined spending plan, he said, otherwise small businesses will continue to leave the state. "People considering this tax package have to think about what is going to happen two years or four years from now, because we appear to be heading down the same path," Markowski said. n CT increases biz taxes by $1B More Business Taxes Connecticut's new state budget asks for businesses and hospitals to pay an additional $1 billion in taxes. Here are some examples: Tax Two-year Collection A sales tax of 2% in FY16 and 3% in FY17 on web and data processing services $170.9M Extending the 20% surcharge on the corporate tax $119.4M Limits use of loss carryforwards against corporate tax to 50% of net income $246.4M Lowers from 70% to 50.01% the amount of tax credits that can be used against the corporate and hospital taxes $82.1M New combined tax reporting requirements for multi-state firms $62.3M New 6% tax on ambulatory surgical centers $35M Sales tax on water companies $8M S O U R C E : C O N N E C T I C U T O F F I C E O F F I S C A L A N A L Y S I S The Senate voted 19-17 to approve the two-year, $40.3 billion state bud- get in the last hour of the legislative session. P H O T O | S T E V E L A S C H E V E R House Speaker Brendan Sharkey (D-Hamden) Joe Brennan, president and CEO, Connecticut Business & Industry Association Gov. Dannel P. Malloy Andrew Markowski, Connecticut state director, National Federation of Independent Business Senate Minority Leader Len Fasano (R-North Haven)

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