For Immediate Release
Jan. 7, 2010

CONNECTICUT GOING IN THE WRONG DIRECTION ACCORDING TO CBIA’S ANNUAL MEMBERSHIP SURVEY

Businesses want legislators to balance the budget, cut spending and be more business-friendly

Connecticut’s business community says the state is moving in the wrong direction and that the state legislature, in particular, must demonstrate by its actions that it wants employers to invest and create jobs here. They are calling on legislators to act on every issue before them this session on the basis of whether or not their actions will enhance Connecticut’s economic competitiveness and help the private sector grow jobs in our state.

According to the Connecticut Business & Industry Association’s annual membership survey, released today, the vast majority of businesses (70 percent) say Connecticut is heading down the wrong path while only 9 percent believe the state is going in the right direction.

"Legislators must work to restore trust and business confidence in our state—only then will businesses invest in the economic activities needed to create jobs here,” says John R. Rathgeber, CBIA president and CEO.

Regarding the state budget, business leaders believe Connecticut must focus on reducing the cost of delivering essential public services in order to preserve direct aid without increasing taxes.  Reforms should focus on bringing employee benefit costs in line with the private sector, streamlining bureaucracies and processes, using the most cost-effective delivery service systems and encouraging regionalization of local services.

“It is imperative for legislators to begin the hard task of reforming state government and reducing state spending,” says Rathgeber,“ because failure to do so will only mean higher taxes on the businesses and families already struggling to survive and recover from the worst economic downturn in recent history.”

Business executives say the most important legislative issues facing Connecticut are taxes and state spending (73 percent), followed by labor/employment policy and health care (10 percent), and economic development programs and initiatives (10 percent).

When asked an open-ended question regarding what single change the state could make to encourage business growth and investment, nearly two-thirds (63 percent) said reduce taxes and/or spending. Another 28 percent proposed creating a better business climate with a more business-friendly legislature.

"Businesses are concerned about the growing anti-business sentiment in the legislature and have lost confidence in lawmakers’ ability to take actions that will stimulate the economy and increase business investment. Only through investment can our companies remain competitive and keep our residents employed,” says Joseph F. Brennan, CBIA senior vice president of public policy.

Brennan added that Paul Tsongas, the late U.S. Democratic senator from Massachusetts, summed it up best when he said, “you can’t be pro-jobs and anti-business.”

If companies are going to expand or relocate their businesses, the majority (68 percent) said they would do so outside of Connecticut.

"Connecticut businesses create good, high-paying jobs for state residents, but legislators continually threaten to add significant burdens to these companies, which threaten their ability to create jobs and remain in Connecticut,” says Brennan.

When it comes to taxes and spending policy, nearly half (49 percent) of survey respondents said their greatest concern is the need to cut or reduce state spending.  Another 35 percent said that overall taxes are their greatest concern. When asked specifically which taxes are most troublesome, businesses identified the overall complexity of the state tax system (23 percent), personal income tax (18 percent), corporate income tax (12 percent) and property taxes (12 percent).

Health care

Almost all businesses responding (99 percent) offer health insurance coverage to their employees, and three-quarters are satisfied with their coverage. The majority (67 percent) believe the private sector is best-equipped to control costs and to health care, while only 23 percent believe so about the federal government and only 10 percent believe so about state government.

Among businesses’ greatest concerns are the rising costs of health care and the large number of mandates (80 percent). Businesses would like to see state government make a number of changes to our health care system. Nearly two-thirds (65 percent) said changes should include lower costs, fewer mandates, medical malpractice reform, funding Medicaid and increasing competition.

Labor and unemployment

Nearly half of respondents operate businesses in other states as well as in Connecticut.  Of those, 65 percent say Connecticut’s labor laws are worse, more restrictive, and/or more expensive than labor laws in other states, making businesses less competitive and able to grow and create jobs here.  When asked in an open-ended question about their greatest labor/employment concern in Connecticut, 39 percent identified excessive or harmful restrictions, regulations, and legislative actions, followed by high unemployment compensation taxes (20 percent) and workers’ compensation costs (14 percent).

The vast majority oppose any further state legislation that would negatively affect labor and employment policies.

• 94 percent oppose workers’ compensation increases
• 94 percent oppose restricting employer-employee communications
• 89 percent oppose union card check, which would eliminate secret balloting
• 88 percent oppose mandatory paid sick leave

Instead, nearly half (47 percent) of respondents say state government should reform the current system by reducing mandates and regulatory costs, while 39 percent say both the unemployment compensation and workers’ compensation programs need to be reformed.

 “Our state government has a historic opportunity to demonstrate that it will do the right thing to give employers the confidence to invest and create jobs here. Restoring trust in Connecticut as a good place in which to do business is essential to the achievement of the state’s economic recovery,” says Rathgeber.

The survey was conducted by e-mail in late 2009. A total of 984 respondents completed the survey, for a return rate of 15.4 percent and a margin of error of 3.2 percent.

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CBIA is the state’s largest business organization, with 10,000 members.

 

For more information contact Nancy Andrews, CBIA media relations manager, at 860-244-1957 or andrewsn@cbia.com.

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