Issue link: https://nebusinessmedia.uberflip.com/i/629712
20 Hartford Business Journal • January 25, 2016 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL Like GE, CT must reinvent itself C all it bad timing, poor planning, or ignorant politics, but the release of a report calling for significant tax increases in Connecticut to pay for Gov. Dannel P. Malloy's ambitious 30-year, $100 billion transportation initiative just days after General Electric announced it was fleeing the state was the exact wrong message to send taxpayers and the rest of the country. Connecticut's economic record and prospects are under national scrutiny right now, and how lawmakers respond to General Electric's departure, and the state's enduring fiscal crisis and lackluster business climate, will be a topic of conversation — and a key component of decision making — in boardrooms throughout the state. The prospect of tolls, higher gas and sales taxes, and new user-based fees for drivers doesn't reinforce the idea that lawmakers will make the state a better place for busi- nesses to operate. We understand this issue is complicated. We agree with Malloy that the state needs to invest more in transportation to make it safer and easier for businesses to move goods and people across the state and to provide better connectivity to key centers of commerce including New York City and Boston. We also need to better connect UConn's Storrs campus, with Farmington and New Haven, which each serve as the type research and technology hubs that GE sought in its move to Boston. We support the Transportation Finance Panel's, and Malloy's, call for a constitutional lockbox that forbids lawmakers from raiding transportation funds to fill gaps in the general budget. However, we can't support a $100 billion spending plan, and the myriad tax increases likely to come with it, until the Democratic governor and General Assembly have a real eco- nomic development and state finance plan in place that will balance the budget long-term and provide a stable business environment that promotes private investment in Connecticut. This will require a reinvention of state, and potentially local, government and difficult decisions that our current political class hasn't shown the ability to make. Just as GE is transforming itself from an industrial giant to a digital-technology company to meet the demands of a 21st-centry economy, Connecticut state government must do the same. And this can't be accomplished by simply throwing more loans and grants at big or small businesses hoping they keep or grow jobs in the state, because when government picks winners it has unintentional consequences including alienating companies that don't get a piece of the corporate greenmail while their competitors do (General Electric was miffed with the state's continued investment in and support of Pratt & Whitney, a GE competitor). The legislature should bring in outside consultants to do an up-and-down, year-long review of the entire state government apparatus, and provide recommendations on how to re-build an organization that is financially stable and supports economic growth. We also need a legislative body with the backbone to implement those changes. All ideas must be on the table, from the elimination or privatization of state agencies to a complete overhaul of our tax structure. We need a big-picture view of our state's strengths and weaknesses and then a comprehensive plan on how to leverage the for- mer and reverse the latter. We must also consider establishing a smaller, full-time professional legislature that can better understand and tackle the issues of a complex 21st-century world. A legisla- ture that convenes only a few months a year and provides short-term fixes to long-term problems has proven ineffective as evidence by Connecticut's continued deficits. Before taxpayers are stuck with another grandiose economic development plan with a hefty pricetag, we urge Malloy and legislative leaders to take a step back and examine, with the help of outside experts, the state's current fiscal and economic prospects, and deliver a more thoughtful, comprehensive approach to running state government. n OTHER VOICES Failed leadership, taxes, contempt ushered GE out the door By Themis Klarides H ouse Speaker Brendan Sharkey (D-Ham- den) recently toured Bristol Hospital alongside the facility's CEO and pro- claimed that he now has a deeper appre- ciation of all the good work being done by the community-based facility and the chal- lenges that it faces. This, after Dem- ocrats castigated state hospital execu- tives for months as greedy, overpaid functionaries more con- cerned with their own bottom lines than delivering quality health care at more rea- sonable prices. Cut CEO pay, that will fix the massive state budget deficit, they said. In the same breath, Sharkey tried to convince the press that Republicans were responsible for massive funding cuts to hos- pitals last year that resulted in hundreds, if not thousands, of layoffs. It was a distortion of reality: Democrats approved the budget cuts, and people were laid off as promised. Republicans actually voted to restore all the lost funding repeatedly in 2015. The very next day the Senate Democratic President Martin Looney tried to convince report- ers and the public that Democratic tax increases and their punitive public poli- cies toward busi- ness had nothing whatsoever to do with the decision by General Electric to move its corporate headquarters from Fairfield to Boston. The despairing lack of leadership in the Democratic-controlled Capitol, combined with the reckless, liberal distortion of reality, and the contempt for private-sector business, are to blame for the loss of jobs in the state and the loss of the iconic corporate entity that is GE. For months, hospitals warned of the dire consequences of the massive cuts — $192 million in the initial budget — the Democrats pushed through in the spring without a single Republican vote. The Democrats promised Connecticut that their way was the right path, a promise that immediately proved fleeting. When the layoffs started rolling through virtually every state hospital like a virus, the Democrats railed that the hospital executives were over paid and responsible for the pain inflicted on their former employees as they headed out the door for unemployment. In a parallel course, GE and the state's other largest employers warned for months that if the Democrats' planned tax hikes went through, it would cause them to reconsider their futures here. Gov. Malloy, abetted by his fellow Democrats, scoffed at the notion that these corporations would ever leave, and that they should pay more to finance Connecti- cut's social-welfare system and services. As public opposition grew to the hospital cuts and corporate taxes, spawned by Repub- licans, the majority Democrats decided they had to roll back some of the damage, hoping it would put salve on the wounds. Too late. Too late to save the hospital workers lost in the initial layoffs, and too late to convince GE they would be wise to stay put. Up until the end of the GE saga the Democrats blamed Republi- cans for rooting for failure and overstating the threat to the state if this employer of 5,700 in Connecticut moved its headquarters elsewhere. What lies ahead? Perhaps under this new found appreciation for state hospitals these institutions will fare better than they have in the last few years under Democratic control of both chambers in the legislature and the Gover- nor's office. But remember, the state faces more massive projected deficits in the next fis- cal year and beyond. GE's corporate personnel are headed for Boston this sum- mer. Just how much of the company's combined $100 mil- lion payroll will leave with them remains unclear. The major question I pose as we move toward another legislative session next month is: What is the lesson learned? The impact of these recent events are not restricted to hospitals or giant corporations, but have implications for all businesses big and small. It is not just about GE, Fairfield's largest employer, but the 65,000 smaller con- tractors and suppliers that do business with the parent. It is not just about our hospitals, typically any community's largest employer, but the thousands of other related business- es that depend on them to survive. n Themis Klarides is the Republican minor- ity leader in the Connecticut House of Representatives. HARTFORDBUSINESS.COM POLL Is Gov. Malloy's $100B transportation plan worth possible tax increases and tolls? ● Yes ● No To vote, go online to HartfordBusiness.com. Last week's poll results: Should CT have spent $145 million or more to keep GE? 32.7% Yes 67.3% No Themis Klarides Send Us Your Letters The Hartford Business Journal welcomes letters to the editor and guest commentaries for our opinion pages. Electronic submissions are preferred and welcome at: editor@HartfordBusiness.com. Or you may fax submissions to Editor, Hartford Business Journal, at (860) 570-2493. ▶ ▶ The major question I pose as we move toward another legislative session next month is: What is the lesson learned?