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36 Hartford Business Journal • December 7, 2015 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL CT must weigh true costs of transportation overhaul I nvesting billions of dollars into Connecticut's transportation infrastructure will create an economic boom in Connecticut, lifting the tides of residents and businesses alike. That's what Gov. Dannel P. Malloy wants Connecticut to believe as he releases a lita- ny of reports espousing the merits of his ambitious 30-year, $100 billion transportation over- haul that would fund investments in highways, roads, bridges, rail and other thoroughfares. The most recent report, conducted by state researchers in conjunction with consult- ing firm CDM Smith, said the $5.3 billion pricetag to replace the I-84 viaduct in Hartford is worth the cost because it would result in more than $9 billion in benefits, like reduced travel time, fewer accidents and congestion, and lower vehicle operating costs. Another recent report, by a Boston consulting firm, touted a 250 percent return on investment for $3.9 billion in upgrades to the New Haven rail line. The reports certainly paint a positive picture of Malloy's "Let's Go CT!" initiative, but they only tell half the story. What they fail to do is reveal how the higher taxes and/ or fees needed to pay for the investments will impact the cost of living and doing busi- ness in the state. The timing of these reports isn't by chance. Malloy's transportation finance panel is expected to release its recommendations this month for how to fund the Democratic gov- ernor's $100 billion plan, and there will undoubtedly be some tough medicine for taxpayers. Whether it's the adoption of tolls, a mileage tax, or higher gasoline taxes, Connecti- cut taxpayers will need to ante up more to sate Malloy's infrastructure ambitions. All of this, of course, is occurring amid a backdrop of significant budget deficits projected over the next few years, raising legitimate questions about whether or not Connecticut can afford to significantly ramp-up transportation investments while it cuts services and/or raise taxes just to maintain current spending levels. Connecticut taxpayers are too smart to allow government-sponsored reports influ- ence them into writing a blank check to state legislators for transportation investments. That's not to say, however, residents don't believe in the virtues of improving congested highways or crumbling bridges. Indeed, the business community has voiced support for rehabbing Connecticut's aging infrastructure and the legislature must stop raiding the special transportation fund to fill holes in the general budget. There are certainly economic benefits to reduc- ing traffic along I-84 in Hartford or in Fairfield and New Haven counties. Expanding a rail line that connects Hartford to New York City and Boston could be a game changer. But at what cost is this all worth it? The problem the Malloy administration faces is that it is proposing an ambitious spending plan at a time when Connecticut is in a state of permanent fiscal crisis, of which there are no clear signs or strategies to get out of. The nonpartisan Office of Fiscal Analysis is projecting deficits for the next three fiscal years, including a $1.72 billion shortfall in fiscal 2017-18. Malloy and the legislature cannot responsibly ramp-up transportation funding with- out offering a big-picture plan as to how they will balance the budget for the foreseeable future. Taxpayers need a full, transparent look at what it will cost to fund state govern- ment over the next few years, including all the tax hikes that will be required to pay for transportation, higher pension costs and all other public services. Only then can we better prioritize our spending and investment needs. Connecticut won't reap the economic benefits of major infrastructure invest- ment if, at the same time, we dramatically increase the cost of living and doing business in the state. n OTHER VOICES A bigger voice in Congress for New England small businesses By U.S. Senator Jeanne Shaheen S mall businesses are the bedrock of New England's economy. That's true not only in my home state of New Hampshire — home to just 1.3 mil- lion people but more than 130,000 small businesses — but all across the region. Small businesses account for nearly 96 percent of our employers. That's why it is critical for New Eng- land's congressional delegations to play an active role as advo- cates for federal policies to help our small busi- nesses stay competitive and grow. As the lead Democrat on the Small Business Committee, I am reaching across the aisle to advance the priorities of our region's small businesses: spur- ring innovation, boosting export opportunities, expanding access to credit, and addressing the high cost of energy. For New England to thrive, we need to sup- port small businesses in the high-technology and advanced-man- ufacturing sectors, which are now the leading drivers of our region's economy. Small businesses in these sectors are well- springs of innovation nationwide, employ- ing nearly 40 percent of America's scientists and engineers, and producing more than 14 times more patents than large businesses and universities. However, unlike large companies, small businesses often find that the risk and expense of ambitious research and develop- ment efforts are beyond their means. That's why I am working on a bipartisan basis to reautho- rize and improve the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which set aside a per- centage of federal agencies' extramural research and development budgets for contracts with small companies. These programs make it pos- sible for small businesses to compete on a more level playing field with much larger businesses, while leveraging the entrepreneurial spirit of small companies to meet pressing federal needs. Another way to keep New England's economy competitive is by helping small businesses penetrate growing and emerging international markets. Ninety-five percent of the world's consumers live outside the U.S., yet only 1 percent of small and medium-sized businesses sell into those markets, compared to 40 percent of large businesses. To help close this gap, we passed legislation creat- ing the State Trade and Export Promotion (STEP) program, which provides direct assis- tance to companies for counseling, market intelligence, and access to foreign markets. To date, STEP has helped 1,949 small busi- nesses in the region, supporting nearly $57 million in sales. I'm working with Sen. Susan Collins (R-Maine) to reauthorize this suc- cessful program so that it can continue to help our small businesses compete globally. In addition, all 12 U.S. Senators from the six New England states oppose misguided efforts to defund the Export-Import Bank. Nearly 90 percent of the bank's transactions directly sup- port small businesses, and the bank has sup- ported more than $3.7 billion in export sales by New England businesses since 2007. It makes no sense to approve a broad new trade agreement with Asian nations, and then shut down the insti- tution that helps to provide capital so American businesses can compete with their Asian rivals. Energy costs in New England are the highest in the nation, and energy efficiency is the fastest, cheapest, most readily available path to reducing those costs. To keep our small businesses com- petitive, we need to encourage businesses to put energy efficiency innovations front and center in their operations. Smart technology can dramati- cally reduce energy consumption, but typically it is too expensive for smaller manufacturers. I'm working with Sen. Lamar Alexander (R-Tenn.) to advance the Smart Manufacturing Leadership Act, which directs the Department of Energy to focus on making the advantages and sav- ings of smart technol- ogy available to small and medium-sized manufacturers with limited expertise and resources. We've come a long way from the Great Recession, when credit all but dried up, but small business entrepreneurs still struggle to secure credit and capital. A recent Harvard Business School working paper by former Small Business Administra- tion Administrator Karen Gordon Mills found that small business loans are down about 20 percent since the financial crisis. That's why it's critical that Congress continue to provide support for small businesses to get access to credit so they can grow. SBA lending plays a vital role in helping small businesses throughout New England, and senators on the Small Business Commit- tee want to ensure that SBA continues to be an option for obtaining credit. We are working now to pass the Commercial Real Estate and Economic Development Act to expand small businesses' access to credit by extending SBA's 504 refinancing program for five years. Earlier this year, President Obama signed into law our bipartisan Veterans Entrepreneur- ship Act, which permanently waives thou- sands of dollars in fees on Patriot Express loan guarantees for veteran-owned businesses. n U.S. Sen. Jeanne Shaheen is the lead Dem- ocrat on the U.S. Senate's Committee on Small Business and Entrepreneurship. HARTFORDBUSINESS.COM POLL Do you expect your household income to climb in 2016? ● Yes ● No To vote, go online to HartfordBusiness.com. Last week's poll results: This holiday season, will you spend more or less compared to last year? 16.1% More 48.2% Less 35.7% Same U.S. Senator Jeanne Shaheen ▶ ▶ For New England to thrive, we need to support small businesses in the high- technology and advanced- manufacturing sectors, which are now the leading drivers of our region's economy.