Hartford Business Journal

24 Hartford Business Journal • November 13, 2017 • www.HartfordBusiness.com Time to rein in state aid to businesses A mong the government initiatives that will see less funding in the years ahead is the state's Small Business Express program, which was created in 2011 to provide capital to smaller companies in exchange for their commit- ments to retain or create jobs. As part of the bipartisan state budget deal, lawmakers have cut the program's funds by $5 million this fiscal year and eliminated funding entirely in fiscal 2019. That's a good thing. While the state does need to do more to help small businesses, it's time for policymakers to end the small business lending program, which has distributed more than $250 million since it was created six years ago. The program, which feeds low-interest (sometimes forgivable) loans and grants to firms with 100 or fewer employees that agree to retain or add jobs or invest in equipment or infrastructure, was a key part of Gov. Dannel P. Malloy's economic development efforts following the Great Recession. It was originally conceived as a two- year program but has been extended several times. The express program was developed at a time when there was a significant credit crunch that restrained small businesses lending. But the lending environment has since improved. Yes, Connecticut's economic recovery has been painfully slow, but it's now been nearly a de- cade since the 2008 financial crisis, making it hard to argue that state government still must be a banker of last resort. As Connecticut's fiscal crisis forces policymakers to re-think the role and scope of state government, the state should wind down its role as a small business lender. Connecticut banks have plenty of capital and are eager to invest in creditworthy borrowers. That's not to say the state should totally exit the economic incentives business. Connecticut companies operate in national and global economies and are constantly being wooed by other states. We must have some tools available, like certain tax credit programs, to remain competitive. Malloy's economic development strategy, however, has relied too heavily on providing loans and grants to businesses. Through June 30, for example, the state Department of Economic and Community Develop- ment (DECD) completed over 1,600 Small Business Express deals worth around $254 million in loans and grants. Both numbers have only increased since that time. Meanwhile, we should all be wary of government's role in picking private-sector winners and losers. That's not just a nod to free market capitalism ethos, but to good and ethical governance. One option the state could consider is con- verting Small Business Express into a loan guarantee program, akin to the U.S. Small Busi- ness Administration. It would be less costly to taxpayers and will get private banks involved. Need for tighter oversight Hartford Business Journal also recently found weaknesses in DECD's Small Business Express program vetting process that ought to be fixed. In a Nov. 6 story ("CT-backed med-tech investor faces fraud allegations") HBJ reported that DECD provided $400,000 in loans and grants to a New York City-based medical technology investment firm, Cliniflow Technologies LLC, whose founder was facing various fraud allegations, mainly in New York. A DECD official said the agency was unaware of Cliniflow CEO David Wagner's legal troubles, even though information on several civil lawsuits filed in federal court against Wagner and companies he's associated with was available online via the federal court sys- tem's PACER database. As stewards of taxpayer money, DECD must do more to vet state-aid recipients. The agency should start by running through state and federal court system databases every business and/or executive seeking an incentive package. Criminal background checks should also be part of the process. If these oversight methods are too costly, then the state shouldn't be in the business of doling out government aid to companies in the first place. COMMUNITY CONNECTIONS Show up and speak up for a stronger community By Katy O'Leary Bannister B eing part of a strong community means showing up and speaking up. A community is so much more than just buildings. It's the connec- tions and bonds between people. And the stron- ger those bonds and connections, the stronger the community is. In Susan Pinker's book, "The Village Effect: How Face-to-Face Contact Can Make Us Healthier, Happier, and Smarter," she explains that from birth to death, human beings are hardwired to connect to other human beings. Face-to-face contact matters; tight bonds of friendship and love heal us, help children learn, extend our lives, and make us happy. I think I knew this at age two. I have been happily showing up and speaking up since I could talk. According to my mother, my first word was "Hi." As she tells it, I would stand in the corner of our fenced yard and yell "Hi" at anyone who passed by. Of course, one could argue that, as part of an already crowded family, I was shopping around for a better situation. Regardless of my motives, many years later, I essentially say "Hi" for a living at a nonprofit organiza- tion that supports communities. In this role, I continue to find that talking to strangers can also be fruitful. Several years ago I was running late for an after-work recep- tion. It had been a long day and I was tired. It was im- portant that I go, however, because I wanted to meet a particular high- profile individual. The reception was to welcome him and several other newcomers to town. When I got on the elevator, there was just one other person. I said hello and asked whether she was headed to the same gathering. Yes, she was. Then I shared that I was there because I hoped to meet a particular man. "That's my husband," she shared, "and I would be happy to introduce you," which she did — in the way only a spouse on a mission can do. Thanks to my father, I was raised with the motto "If you don't ask, you don't get." This is arguably another byproduct of an overcrowded family, but as a result, I know how to speak up and ask for what I need. The acts of showing up and speaking up can take a variety of forms. Even though we all know that face-to-face communication is much richer than interacting through social media, it's almost counterculture these days. Why not post, text, conference call and Skype instead? Because we can't really hear each other, or connect fully with one another when technology sepa- rates us. On a Saturday morning a few years ago I started to text a friend, whom I see infrequently, with a spontaneous dinner invitation for that evening. Halfway into my text I decided to call instead. She answered the phone, declined my invitation and asked for a rain check. Granted we weren't face to face, but I could hear something in her voice that I would not have sensed in a text. When I asked her what I was hearing in her voice, she shared news of her cancer. Wow. How long would it have taken me to learn of her diagnosis had I texted instead of actually having a conversation? Going beyond our friends and talking to strangers is a proven strategy for strengthening our communities, too. Pinker points out that looser in-person bonds combine with our close relationships to form a personal "village" around us, one that exerts unique effects. Not just any social networks will do: We need the real, in-the-flesh encounters that tie human families, groups of friends and communities together. I recently watched author and stranger enthusiast Kio Stark talk about the ben- efits of talking to strangers for "beautiful moments of genuine connection." "When you talk to strangers, you're making beautiful interruptions into the expected narrative of your daily life — and theirs," said Stark. Let's consider the important communi- ties in each of our lives. Then show up and speak up to strengthen them. As the mayor of Dr. Seuss's Whoville said, "We've got to make noises in greater amounts! So, open your mouth … for every voice counts!" In- deed, every voice does count. Katy O'Leary Bannister is Leadership Greater Hartford's senior director of development and membership. Greg Bordonaro Editor Why not post, text, conference call and Skype? Because we can't really hear each other, or connect fully with one another when technology separates us. The express program was developed at a time when there was a significant credit crunch that restrained small businesses lending. But the lending environment has since improved. Opinion & Commentary Katy O'Leary Bannister

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