Business Climate and Budget
The discussion was cordial, but both sides made their points.
On May 12, Gov. Dannel Malloy, CBIA President and CEO Joe Brennan, and MetroHartford Alliance CEO Oz Griebel took part in a Policy Pairings forum at the Thomas Hooker Brewing Company in Bloomfield.
Connecticut Mirror Capitol Bureau Chief Mark Pazniokas served as moderator.
The topic on this night: Connecticut’s fiscal situation and its impact on the business climate.
Rankled by Rankings
A few days earlier, Chief Executive magazine released its Best & Worst States for Business index, which saw Connecticut slip one place since last year: from 44th to 45th.
When asked by Pazniokas about what metrics are most important in assessing Connecticut’s business climate, Brennan argued that gross state product and job growth are most salient.
Citing CNBC’s 2014 America’s Top States for Business index, he pointed out that the state ranked very low in economic performance.
Gov. Malloy expressed skepticism about the reliability of national business climate rankings in general, referring to Connecticut’s high rank in many areas, including health outcomes and education.
“In 12th-grade reading, writing, and mathematics, we’re number one in the country,” he said. “We’ve implemented some new standards quite effectively in holding ourselves responsible for even greater educational outcomes, particularly in our urban environments.”
Brennan noted that because Connecticut’s poor business climate rankings are consistent across numerous indexes, they should not be ignored.
‘A Horrific Signal’
Discussion quickly turned to the $2.56 billion tax hike recently passed by the legislature’s Finance Committee and the $1.5 billion in new spending approved by the Appropriations Committee.
Griebel said the committees’ actions “send a horrific signal to the private sector in terms of their confidence” in state government.
He suggested that “sending a strong signal that there are going to be structural changes in this budget is critical,” advocating for the adoption of the Connecticut Institute for the 21st Century’s sustainable spending recommendations.
“The key is creating more economic vitality, economic growth,” said Brennan. “You can’t take tax money from one group and give it to another and expect to solve our [fiscal and economic] problems.
“I don’t think we’re at the point where people understand that there are more alternatives than either raising taxes or cutting funding to families with disabled children. That’s a false choice.”
Brennan noted that CBIA has been advancing a positive agenda, emphasizing Connecticut’s enormous economic potential, but the committees’ proposals “changed the game.”
He added that such a budget would make it extremely difficult for the business community to support the spending necessary to carry out the governor’s long-term plan to improve the state’s transportation infrastructure: a vital component of a healthy Connecticut economy.
“We’ve been supportive, but we have to ask how the state is going to be competitive if we have a huge tax increase and then have to pay for a major transportation upgrade.”
Gov. Malloy was upbeat on the subject.
“I predict we’re going to come out [of budget negotiations] better than it appears right now,” he said, arguing that the legislature has “no chance of getting their tax package passed.”
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