Hartford Business Journal

16 Hartford Business Journal • December 19, 2016 www.HartfordBusiness.com P.O. Box 2468, New Britain, CT 06050 800.969.3837 nteriors.com Summer, Fall, Winter, Spring Keep your exterior colorful and festive year round with our exterior seasonal program! indoor / outdoor plantscapes • holiday decor from page 1 But the Democratic governor said during a recent press conference that he won't be "leading with the expectation that we're going to raise a lot of additional dollars," and that he wasn't yet prepared to be "trapped into an answer" on new taxes until he had more data. "There's no doubt there will be cuts and consolidations in this budget, there have to be," Malloy said. "I think there are tax chang- es that I'd like to see that are beneficial to the business climate of the state." The governor's office declined to elaborate on those potential tax changes for this story. Joseph Brennan, CEO of the Connecticut Business and Industry Association (CBIA), said he's not privy to the governor's plan, but hopes it doesn't rely on tax hikes. "As hard as it's going to be to solve our bud- get problem, if we try to do it with tax increases, it's only going to make the situation worse by driving more wealth, more businesses and more jobs out of the state," Brennan said. He said businesses were pleased with the 2016 legislative session and he hopes 2017 can build on that. "I know job numbers have been troubling over the past few months," Brennan said, refer- ring to the nearly 14,000 jobs the state shed in October and September. "But I'm hearing anec- dotally from companies that they're hiring and starting to expand. I think we can create some positive momentum for Connecticut." One positive Malloy has been touting this month is a long-sought-after deal with state- employee unions that his administration said will help Connecticut avoid multi-billion-dol- lar spikes in pension payments anticipated next decade. "We now have a much more dependable, sus- tainable and predictable way forward … than we've had since 1983," Malloy said of the deal. But the pension deal, which pushes billions of dollars in annual obligations more than a decade into the future to prevent one-time payments that would wreak havoc on the bud- get, is "a long-term play for stability" that isn't expected to be key to solving deficits over the next two years. State agencies have been preparing cost- cutting proposals that include salary cuts, facil- ity closures and a variety of other measures. Meanwhile, newly empowered Republicans — who now have equal representation in the Sen- ate and a narrow 79-72 minority in the House — are relaunching their push for the legislature to enact strict caps on both spending and bonding. "The chances are better just on sheer numbers," said House Minority Lead- er Themis Klarides (R-Derby) of pushing through some of the GOP's biggest priori- ties. "This is the most members we've had since the Reagan landslide of '84." Senate Republican Leader Len Fasano (R-North Haven), who along with Democrat Leader Sen. Martin Looney will preside over the evenly split chamber, said he sees plenty of room for budget cuts to close the deficit, including tightening rules on quasi-public agency managerial contracts, consolidating over- lapping agencies and programs, and cutting "pet projects." "We can't give $1 million to play ten- nis in New Haven. We can't give $1 million for an arts festival," Fasano said. "We're in austere times." How would Senate Republicans respond to a budget that includ- ed tax increases? "I would say that I would probably be against a budget that had tax increases as a solution," Fasano said. "There are a lot of cuts. Can you get to $1.3 [billion]? I don't know, I've got to figure out where we sit." Republicans will also call for union con- cessions, though Fasano acknowledges that unions would have to voluntarily agree to open any negotiations before 2022. Malloy pledges to protect biz toolbox While the outcome of the coming session is anyone's guess, Malloy told MetroHartford Alliance members last week that he plans to protect the "toolbox" of programs and incen- tives that the state has launched during his tenure to help large and small businesses. Malloy referred specifically to R&D tax credits, the Small Business Express program and the Manufacturing Innovation Fund. The governor also spoke of large, custom deals his administration has brokered with Pratt & Whitney and other large companies. "Go back six years. How many of you thought UTC and Pratt would not only still be in the state but have made a long-term commitment?" Malloy said. Hartford's finances, XL Center One major question in the coming session is whether Hartford Mayor Luke Bronin will be able to convince the legislature to send significantly more aid to the cash-strapped Capital City. Though the first-term mayor hasn't put a number on the ask, he has been speaking and taking questions from sometimes skepti- cal audiences in surrounding communities, where he has been selling the need for long- term structural reform at the state level to ensure Hartford's future. During his remarks at the MetroHartford Alliance breakfast, Malloy, who previously employed Bronin as his chief legal counsel, didn't pledge to save Hartford at all costs. And he noted that the state already pro- vides Hartford with approximately $250 million a year, and has made major invest- ments in public transportation and housing in the city. But he expressed confidence in Hart- ford's future. "I think the future of Hartford is pretty good on a long-term basis," Malloy said. "On a short- term basis, the great mayor, Luke Bronin, has some very real challenges and I commend him for publicly discussing those challenges." Aresimowicz, whose second in command, State Rep. Matt Ritter, is a member of the Hartford delegation, said he aims to help the city avoid a possible bankruptcy, calling it "the last option in my mind." "We don't want Hartford to struggle and stop the much-needed progress," he said. Fasano, however, was cool to the thought of a big ask from Hartford in a tough budget year, saying he'd need a detailed look at the city's books. He also thinks the city should sell the XL Cen- ter, which is leased by the Capital Region Devel- opment Authority, a quasi-public entity hoping to convince the legislature to spend $250 million on a significant overhaul of the aging venue. "If you want to hold onto that building, don't come to me for more money," Fasano said. As for Malloy's take on the XL Center, it's unclear if his budget proposal will include a $250 million investment this session. "I can't imagine a Capital City, or … the state of Connecticut not having a facility like that," he said. But he said the business community will need to tell already inundated legislators that the venue is important. n Lawmakers weigh tax changes Themis Klarides, House Minority Leader (R-Derby) Joseph Brennan, CEO, Connecticut Business and Industry Association (CBIA) (Top) House Speaker Joseph Aresimowicz (D-Berlin). (Above) Senate Republican Leader Len Fasano. P H O T O S | C O N T R I B U T E D

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