Hartford Business Journal

20 Hartford Business Journal • February 29, 2016 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL State must restrain government-program growth T he size and scope of state government is often debated when the General Assem- bly is in session, but the rhetoric has intensified as Connecticut grapples with its ongoing fiscal crisis. Many agree it's time for state legislators to show restraint by curtailing spending and the expansion of government programs. It's a bipartisan philosophy shared by many legislative leaders, some of whom have sworn off tax increases despite next fiscal year's half-billion dollar projected deficit. Billion-dollar deficits loom in the future. It's against that backdrop that calls for the state to get involved in several private indus- tries raise alarm bells. Last week, the Hartford Business Journal reported on the likelihood of separate bills being proposed this legislative session that would establish a government- run retirement plan for private-sector workers and use state funds to help expand the availability of affordable, ultra-high-speed Internet to residents and businesses. While both proposals are well intentioned, they are wrong minded. State govern- ment is in no position to launch new benefit programs when it can't control the costs of ones it already offers. The establishment of a state-run retirement plan is particularly troublesome because Individual Retirement Accounts and other retirement-savings products are already made available by the private sector. Comptroller Kevin Lembo, a key proponent of the state-run plan, argues the retire- ment-planning industry is not adequately servicing certain swaths of the workforce, particularly those in lower-paying jobs at small companies. He's right to some extent. There are an estimated 600,000 workers in the state whose employers don't offer a retirement plan, and the percentage of employers nationwide participating in savings programs is lackluster. He also makes the valid argument that if people don't save enough for retirement they'll end up on the government dole. But the solution can't immediately be for state government to fill the void. That philosophy has driven Connecticut to its permanent state of fiscal crisis, and it ends up being counterintuitive. We've overleveraged our balance sheet and now basic services government is supposed to provide to those who need it most are on the cutting board. State government can't be all things to all people. Instead, the state must think of creative ways to work with the private sector to advance the greater good. The phrase "private-public partnership" has been bandied around the State Capitol for years and there are some successful examples of it working. For example, in this week's issue, News Editor Gregory Seay reports on the joint efforts of the state's eco- nomic development agency, private chambers of commerce and nonprofits in wooing Israeli companies to Connecticut. Financial planners suggest the state invest in an education campaign to help people who don't have retirement plans understand where they can access them. Maybe new incentives could be offered to individuals who open a retirement account outside their employer. On the broadband issue, the state needs to partner with telecom companies, rather than compete with them, to expand access to gigabit-speed Internet, which many agree is crucial in Connecticut's efforts to attract technology, bioscience and other companies using large amounts of data. Connecticut is already a top-ranked state when it comes to high-speed Internet access, so reinventing the wheel seems costly and wasteful. Groton's failed attempt at a government-owned broadband network, for example, cost it $30 million. The state will never have the expertise of private telecom companies nor should it try to obtain it. What government does have is the power of the bully pulpit and to be a convener of strategic thinking. Policymakers must fully exhaust that strength, before they venture into areas that pose further risks for taxpayers. n OTHER VOICES Job growth, fiscal sustainability keys to CT's economic success By Oz Griebel G ov. Malloy's budget address and his subsequent town hall meetings clearly illustrate the emerging bipartisan con- sensus that we must change the focus, process, and tone for setting fiscal policy in order to reestablish the confidence needed for job growth and capital investment by the private sector. Nine organizations representing the state's private sector employers and over 100,000 employees are working together to build upon that consensus. On Feb. 1, our nine organizations sub- mitted a letter to the governor and the legislature emphasizing the three core principles of: private-sector engagement, economic growth, and spending discipline. We believe that following these core prin- ciples are critical to achieving four key objectives that will sustain Connecticut's long-term growth: • Retaining and recruiting young talent; • Strengthening the livability and com- petitiveness of our urban centers; • Ensuring a best-in-class transportation system; and • Re-establishing 4 percent annual increases in per- capita income. Making progress on these critical objec- tives will reignite the private-sector confi- dence that generates the tax revenues that support both services and infrastructure investments. Private-sector engagement Every state faces the confluence of global economic volatility, underfunded retiree pension and healthcare benefits, and structural budget deficits. Connecticut's greatest advantage in addressing our challenges lies in the latent but powerful combination of the state's private-sector employers and gov- ernment leaders. The sustained engage- ment of private-sector expertise with state leaders on key policy issues will drive job growth and capital investment and help to improve the state's delivery of core govern- ment services. Growth The Feb. 16 summit hosted by the Depart- ment of Economic and Community Develop- ment (DECD) and the Commission on Eco- nomic Competitiveness (Commission) and its research effort with McKinsey & Co. provided two opportunities for private-sector engage- ment to leverage Connecticut's broad and deep economic foundation in insurance and financial services, precision manufacturing, the health sector, digital media, higher educa- tion, and science and technology. Similarly, establishing a biannual statewide dialogue on Connecticut's economic and employment strategy will foster bipartisan and public-pri- vate ownership of a long-term plan that takes into account economic trends, fiscal realities, and the state's quality of life. Spending discipline Connecticut must also strengthen spend- ing controls and embrace efficiency in order to have the resources necessary to invest in education, infrastructure, and the state's urban centers. We applaud Malloy's efforts to reform state-employee labor agreements and his leadership on developing innovative solutions to the state's retiree pension and healthcare benefit crisis. We also support the Connecticut Insti- tute for the 21st Century's recommenda- tions on delivering core government servic- es more effectively. Finally, we must ensure that our tax policies are competitive and predictable in order to encourage private- sector employers of all sizes to expand, to attract workers with "in-demand" skills, and to allow retired residents to remain in Connecticut. Two of the most important actions to strengthen spend- ing discipline are to pass two constitu- tional amendments to ensure that they are on the Nov. 8, 2016 ballot. The first supports the gover- nor's call for a lock- box to ensure that all Special Transporta- tion Fund monies are used for trans- portation infrastruc- ture. The second will ensure that the state's constitutional spending cap — critical to the adoption of the personal income tax in 1991 — rests on clearly understood and enforceable definitions. We have submitted drafts of both amendments to the governor and the legislature, which can be found at http://bit.ly/AllianceSources, along with the Feb. 1 letter. By building and sustaining the engagement of the private sector with the governor and the legislature and focusing on economic growth and disciplined spending, we will ensure that Connecticut achieves the four objectives noted above while dramatically enhancing its ability to compete aggressively and successfully for jobs, capital and talent. n Oz Griebel is the president and CEO of the MetroHartford Alliance. HARTFORDBUSINESS.COM POLL Should CT end minimum pricing rules for alcohol? ● Yes ● No To vote, go online to HartfordBusiness.com. Last week's poll results: Should CT establish a state-run 401(k) plan? 62.4% Yes 37.6% No Oz Griebel ▶ ▶ Connecticut must also strengthen spending controls and embrace efficiency in order to have the resources necessary to invest in education, infrastructure, and the state's urban centers.

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