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12 Hartford Business Journal • October 23, 2017 • www.HartfordBusiness.com EDITOR'S TAKE Regionalism can no longer be brushed aside in Connecticut I magine a Connecticut in which home rule wasn't ingrained in our culture and West Hartford, Hart- ford and East Hartford were combined into one city. Three local governing bodies could be folded into one, allowing the municipalities to share resources, cut back-office and overhead costs, consolidate schools and act more cohe- sively in promoting economic development. Would such a fundamental shift help solve Hartford's fiscal crisis and lead to a more prosperous future for the Greater Hartford region? We'll likely never know because municipal mergers are largely unheard of in Connecticut and the likelihood of Hartford's neighbors agreeing to absorb the Capital City's fiscal problems is slim to none. But it's a useful exercise to re-think the way Connecticut ought to be governed in light of its ongoing fiscal crisis, which will likely haunt the state for years to come, threatening funding to cities and towns that have few options to raise new revenues other than to increase property taxes. Indeed, municipalities, up until this year, have largely been shielded from major funding cuts as state government has been forced to rein in expenses and raise taxes to make ends meet. That, however, has begun to change, and rightfully so. With the state operating under Gov. Dannel P. Malloy's executive order since July 1, hundreds of millions of dollars in local aid has been withheld, leading Moody's Investor Service last week to assign negative outlooks to, or place under review for downgrade, the credit ratings of 51 cities and towns. Even if lawmakers restore most local government funding this year, which they appear closer to doing, future deficits likely await. Few realize it, but municipal aid is the single largest state expenditure, accounting for about a quarter, or more than $5 billion, of the annual state budget, according to Malloy's office. Most of that money funds education ($4.1 billion) while the rest underwrites local governments. Lawmakers have little choice but to trim some of that spending if they want to avoid more statewide tax hikes. That's why the prospects of municipal consolidation or mandatory cost sharing must be brought to the forefront of the conversation. In this week's issue, Hartford Business Journal News Editor Matt Pilon explored the topic. He found some local governments or public officials interested in a potential merger, including a selectman in Durham and the cash- strapped town of Scotland. Will the mergers happen? Most likely not. It's a tough sell politically and the legal hurdles — it would require the approval of town governments as well as a special act from the General Assembly — are many. But while taxpayers complain about the inefficiencies at the state level, we must also keep a sharp eye on how local governments are spending money. And, like the state, many cities and towns are hamstrung by union contracts. The state's Regional Performance Incentive Program provides baby carrot incentives for communities to regionalize services, but a stick approach must be adopted if we are going to truly change the cost structures of municipal governments. Tie local aid to certain cost-saving/cost-sharing metrics and don't allow towns to collec- tively bargain away their ability to regionalize services. That's a start. In some cases, a merger may make practical sense, even if it's not politically feasible. Take the West Hartford-Hartford-East Hartford case as an example. Hartford's fiscal crisis has been brought on by myriad factors including mismanagement by past administrations (the publicly financed minor league baseball stadium, for example, was a financial boondoggle, even though the end product has brought a new sense of vibrancy to downtown). But the Capital City, in many ways, has been set up to fail. That's the clarion call Mayor Luke Bronin has echoed since he was sworn into office in 2016. Consider this: Hartford has a population of around 123,000, or about double the number of residents in neighboring West Hartford. Yet, West Hartford has more land (22 square miles vs. Hartford's 17 square miles) and a much larger property tax base to draw from (West Hartford's grand list was $6.2 billion in fiscal 2016 vs. $4.1 billion in Hartford). Meantime, Hartford's 74.29 commercial mill rate (vs. West Hartford's 41.04 mill rate) makes it impossible to spur private development without government subsidies. Add in the fact that more than 50 percent of property in Hartford is tax exempt because it's home to many government, college and nonprofit entities, and it's not difficult to see why the Capital City is on the brink of bankruptcy. Yes, Hartford receives hundreds of millions of dollars annually in state aid, but a vibrant city can't depend on the whims of state government, which has its own dire fiscal crisis. If Greater Hartford and the state as a whole don't start to think regionally in more sub- stantive ways, our fiscal and economic woes will continue. COMMUNITY CONNECTIONS Corporate social responsibility helps community and company bottom lines By Ted Carroll I have spent my entire career in the nonprofit sec- tor. During most of those 40 years, I have worked hard to build strong ties to the business commu- nity, but my rationale for doing so has evolved. As a trained social worker, I used to argue that businesses should support community efforts because it was simply the right thing to do. Today, with a deeper appreciation for the needs and motiva- tions of business, I believe that private- sector support for nonprofits is not only good for the community, but it is very good for business as well. And the re- search seems to back me up. To begin, Forbes Magazine reports that 82 percent of U.S. consumers actually consider whether a business demonstrates social respon- sibility when deciding what services and products to buy. Moreover, at a time when we are competing in this region for talent, the magazine also found that 86 percent of Millennials greatly value their com- pany's community involvement and view it as a deciding factor when considering where they work. Connecting private enterprise to public interest is the groundbreaking business strategy for the 21st century, as documented by Rosabeth Moss Kanter, the Ernest L. Arbuckle professor at the Harvard Business School and director of the Harvard University Advanced Leader- ship Initiative. In her highly acclaimed book, "SuperCorp," Kanter demonstrates that employees give their best when their efforts are tied to a higher purpose. At a time when innovation in all industries is a business imperative, she shows that employees are more inclined to be creative when their company is involved with mak- ing changes that help the world. In a keynote address to the Internation- al Leadership Association, Kanter declared that today's workforce "can't just think 'out of the box,' they need to think 'out of the building.' " They need to interact with people who see the world from different perspectives and who have their own in- novations to share. Kanter draws on IBM, Proctor & Gamble and other multinational corporations to make her case, but I have observed outstanding examples of how our local businesses also seek mutually beneficial ties to the larger community. To strengthen those connections and to help their employees acquire new skills and insights, virtually all of the major employers in this region have enrolled their aspiring and established leaders in Leadership Greater Hartford's various community leadership programs. They encourage their employees to get involved with the United Way, to serve on nonprofit boards and to support other philanthropic efforts. And just last month, scores of area businesses nominated candidates for Hartford Business Journal's "40 Under Forty" award, citing in part their employ- ees' strong commitment to community service. Employee community involvement, then, seems to be part of the civic DNA in Greater Hartford. Indeed, it may be one of our competitive advantages. Recently, I learned about a business-community relationship that illustrates why we might use this strategy more often. Boris Levin is president and CEO of Mott Corp., a high-precision filtration and flow control company based in Farming- ton. Having learned that his employees were interested in making a difference in the local community, Levin began discus- sions with Susan Walkama, president and CEO of Wheeler Clinic, a Plainville-based nonprofit health and human service orga- nization providing a comprehensive con- tinuum of integrated primary care, mental health and addiction recovery services and other supports across Connecticut. A partnership emerged that involves Mott employees regularly working side-by-side with Wheeler staff as health ambassadors in an array of community- based health outreach activities. They've helped keep kids entertained so moms could get health screenings. They've walked hand-in-hand with individuals in recovery to reduce stigma. They've made Christmas special for dozens of children in foster care. They've held the hands of grieving parents who lost a child to overdose. Levin reports that these engagement activities have broadened his employees' awareness of those with serious life chal- lenges and made them better and more empathetic leaders. He adds that these activities have also helped his employees "get to know one another better and to create stronger bonds and trust among them," an unanticipated but welcome busi- ness outcome. In sum, corporate social responsibility is what consumers want and what our workforce increasingly expects. It spurs innovation and employee engagement, creates empathetic leaders and generates trust among company workers. And if this ROI isn't compelling enough, it's also the right thing to do. Ted Carroll is president of Leadership Greater Hartford. Ted Carroll Greg Bordonaro Editor Opinion & Commentary