Hartford Business Journal

28 Hartford Business Journal • August 31, 2015 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL State should repeal unitary reporting tax S tate policymakers' short-sightedness was on full display last week when Gov. Dannel P. Malloy publicly admitted that he and his so-called economic devel- opment team were forced to offer General Electric an assistance package to maintain their corporate headquarters in Fairfield. GE is holding Connecticut hostage by threatening to leave the state following anoth- er wave of tax hikes enacted by the Democratic-controlled legislature. New York, Geor- gia, Indiana and Texas are among the states wooing the energy conglomerate. GE's future in Connecticut is a big story, but represents just another chapter in the sad saga of Connecticut's economic decline. Connecticut's poor business climate and unstable financial position has left the state permanently vulnerable to corporate raiding. At stake right now is GE's 5,700 Connecticut jobs and the $14 billion the company says it spends in the state, sup- porting 65,000 suppliers. No doubt, lower- cost states smell blood in the water and the Malloy administration will be forced to negotiate with other major employers in the months and years ahead as they demand incentive packages to maintain Connecticut jobs. Malloy and the legislature have no one but themselves to blame. Continuing to rely on tax increases to fund state gov- ernment has proven time and time again to be detrimental to the state's economic fortunes. What's worse in GE's case, is that the Fairfield company — along with other major Connecticut corporations — warned Malloy and the legislature that adopting the unitary reporting tax, which places a levy on companies with multi-state operations, would make them consider fleeing the state. Senate Majority Leader Martin Looney (D-New Haven) and other Democratic leaders tried to call GE's bluff, arguing that every other New England state has a unitary tax and that Connecticut was simply following suit. Unfortunately, that argu- ment is short-sighted and underscores lawmakers' inability to comprehend how to create a business friendly environment. Connecticut, which has long been known as a high-cost state, needs every competitive advantage it can leverage to retain and attract businesses. Being the only New England state without a unitary tax wasn't a bad thing. It was a selling point to business decision-makers. GE obviously wasn't bluffing and if Malloy caters to their demands and offers the company tax breaks or other incentives it will end up offsetting some of the new rev- enue that will be raised through the unitary tax. Meantime, Connecticut residents and other businesses will be forced to absorb an additional tax burden. Rather than placate to one company's demands, the legislature should repeal the unitary reporting tax and trim the lost revenue from the budget. n HARTFORDBUSINESS.COM POLL What is your preferred financial institution? ● Bank ● Credit union ● Other To vote, go online to HartfordBusiness.com. Last week's poll results: Are you worried technology will one day displace your job? 13.3% Yes 86.7% No OTHER VOICES Leadership of next administration key to Hartford's future success By Oz Griebel T he 2016 mayoral and city council elections represent a seminal moment in Hartford's political history and will require the city's businesses, education and healthcare institu- tions, and residents to coalesce with the Novem- ber winners around a comprehensive agenda that drives the economic and revenue growth fundamental to the Capital City's quality of life. As a representa- tive of the private sector, the Metro- Hartford Alliance recognizes our responsibility to work closely and collaboratively with November's win - ners to eliminate the impediments to the city's ability to capi- talize fully on the significant federal, state and private invest- ments of the past 15 years. The election by voters of competent and energetic leader- ship in November will be the first and most important step in galvanizing the sustained commitment of all parties to such an agenda. The Alliance respectfully raises the fol- lowing issues as fundamental to Hartford's future success: Public safety: The safety of resi- dents, businesses and visitors in all neighborhoods must remain the top prior- ity of the next admin- istration with that priority manifested in the adequate staff- ing of an effective community policing program. Similarly, the administration and the police chief must continue to engage private-sector support of valuable neighborhood pro- grams like PAL and Project Longevity. Property tax and grand list growth: The new admin- istration must adopt the recommendations set forth in the report of the 2014 Tax Task Force, the most recent in a series of task force reports that collect the proverbial shelf dust. Such implementation will begin the long overdue reformation of an antiquated tax structure that continues arbitrary and unproductive property classifications that unfairly punishes motor-vehicle owners, and, most importantly, that precludes pri - vate-sector investment without significant public subsidies. Action must be taken to abolish this threefold combination that has produced a steadily declining grand list, a diabolical mill rate, and an unsustainable burden on commercial property owners of all sizes — property owners who serve as the city's primary employers. Relationships with CRDA and CRCOG: The city's administration must have a fully engaged and constructive working relationship with the Capital Region Development Author- ity, which oversees more than 1,000 new units of housing, the relocation of a UConn campus to Hartford, and the renovation of the XL Cen- ter. A similarly effective relationship with the Capital Region Council of Governments is vital to identifying regional approaches necessary to controlling growth in the cost and improv- ing the quality of municipal services. Downtown North development: The new administration must work with the Hartford Stadium Authority to ensure that the repay- ment of the authority's bonds issued to fund the construction of the minor league stadium do not increase the city's operating budget. The Alliance has consistently empha- sized this critical point as well as the equally important principle that the sta- dium must be the successful catalyst to completing the Downtown North devel- opment as approved by the city council earlier this year. If completed, the DoNo development will provide a critical link between the downtown and the north end, spur additional economic activity, increase amenities for residents and visitors, and integrate with the highly valued goals and accomplishments of the iQuilt initiative. Education: The future of the city and the region depends to a large degree on Hartford's high school students grad- uating with the skills necessary to pursue higher education and quality employ- ment opportunities and to contribute to the region's civic infrastructure. That graduation goal requires that the administration, school board and superintendent, and organizations such as Achieve Hartford and the Hartford Con- sortium of Higher Education, continue to work together to accel- erate the pace of reform that has produced sig- nificant gains in closing the performance gap between city and suburban students. The Alliance applauds all those respon- sible for the past 15 years of improvements in the city's economy and quality of life. At the same time, we remain eager to work with a mayor and a city council recommit- ted to fulfilling our fiduciary responsibility to ensure that those improvements produce an ever-stronger Hartford region. As the city's voters go to the polls on Sept. 16 and Nov. 3, we urge them to elect those individu- als who will provide the leadership neces- sary to attain that goal. n Oz Griebel is president and CEO of the MetroHartford Alliance Oz Griebel ▶ ▶ The safety of residents, businesses and visitors in all neighborhoods must remain the top priority of the next administration with that priority manifested in the adequate staffing of an effective community policing program. ▶ ▶ Connecticut, which has long been known as a high-cost state, needs every competitive advantage it can leverage to retain and attract businesses. Being the only New England state without a unitary tax wasn't a bad thing. It was a selling point to business decision- makers.

• Cover