Molly Kellogg, CEO of Hubbard-Hall chemical company in Waterbury, has a dilemma many Connecticut employers face.

Hubbard-Hall, a 170-year-old family business, is looking to reinvest $1 million in its manufacturing operations.

Molly Kellogg, president & CEO of Hubbard-Hall asking Governor Lamont a question at CT Business Day
Waterbury or South Carolina? Hubbard-Hall CEO Molly Kellogg poses the question at Business Day.

But Kellogg must decide whether to spend it on their Waterbury facility or their operation in South Carolina, where the cost of doing business is far less than Connecticut.

"Why should I invest back in Connecticut?" Kellogg asked Gov. Ned Lamont March 4 at the state Capitol, where she and hundreds of employers attended Connecticut Business Day.

Given that the legislature last year passed two bills that hurt small business, and is proposing more business-unfriendly measures this session, Kellogg is torn.

"I'd rather invest in Connecticut, of course, but I've got a board to report to," she said.

"I've got six generations of family members here in Connecticut so I will do what I can do to invest here.

"But I need help."

Advantages

That was the message Connecticut employers had for state lawmakers and policymakers on Connecticut Business Day: We need help.

From high taxes and energy prices, to regulatory hurdles, to one-size-fits-all workplace mandates, business leaders want lawmakers to promote policies that allow employers to focus on job creation.

"The strategic reasons are there, but I need better economic reasons for it," Kellogg said.

"If I run the numbers, South Carolina financially makes more sense, but we've been a Connecticut business, we've been a Waterbury business since 1849, and I want to reinvest, but they've got to make it easier to do that."

Lamont took a positive tone, praising Connecticut's workforce, education system, and location.

Governor Lamont addressing the crowd at CT Business Day 2020
"Stay positive." Gov. Lamont addresses the Business Day crowd.

“We have some advantages that [other states] don't have and that's what I've got to try to emphasize,” he said.

"I don't want to knock anybody else, but I'll just stay positive on Connecticut.

"I think we have more of a devotion in terms of workforce. We are a better gateway to world markets. Certainly, a better gateway to the New England market.

"I'm not going to tell you we're less expensive than Florida or South Carolina, but I can tell you we inherited this big deficit and held the line on taxes.

"I'm trying to give people a sense of fiscal stability and consistency."

Workforce Challenges

Nicole Russo of Microboard Processing, which manufactures defense items at its Seymour facility, thanked Lamont for expanding the state's STEM training programs.

However, she said new hires are taking their skills to other states because of Connecticut's high cost of living.

She also said older recruits from outside Connecticut want a 20%-to-30% salary bump to cover the state's high cost of living.

"The best and brightest come to Connecticut because of our great university system," Lamont responded.

"We need to make it easier for them to stay, expand, and grow here."

Rebuild Trust

Richard Sinclair, a food and beverage director at DoubleTree Hotels, said he attended Business Day to get information and planned to be back the next day to testify on a bill impacting restaurants.

"I think there's mistrust among the public with the legislature and I think if we open communications, we can rebuild that trust," he said.

It was the first Business Day event for Jillian Meyerhoff of the Cornell Scott-Hill Health Center.

"There's mistrust with the legislature and if we open communications, we can rebuild that trust."

DoubleTree Hotels' Richard Sinclair

"I'm really excited to be here, to learn about the legislation, and to meet some people, and network," she said.

"It's just a matter of keeping your finger on the pulse and showing you care," said George Frantzis of Quassapaug Amusement Park in Middlebury.

"There are a few bills coming up that could affect us so we want to follow them."

Economic Development

Lamont also promoted the shift in his administration's economic development strategy, which now emphasizes pay-as-you-grow incentives for businesses that create jobs.

"It's good for small businesses here in Connecticut, not just the big out-of-state folks we were previously trying to recruit," he said.

Glendowlyn Thames, deputy commissioner of the Department of Community and Economic Development, told the crowd the agency recognized businesses want predictability around state tax policy and finances.

"Stabilizing the state's fiscal situation is a precursor to economic growth."

DECD's Glendowlyn Thames

"Stabilizing the state's fiscal situation is a precursor to economic growth," Thames said.

"That's the message we need to send to the business community to tell them we're serious about growing the state's economy."

Transfer Act

Thames was part of a panel of state agency leaders that included Department of Energy and Environmental Protection commissioner Katie Dykes, Department of Administrative Services commissioner Josh Geballe, and John Biello, acting commissioner of the Department of Revenue Services.

Dykes addressed the agency's regulatory reform efforts, noting the use of benchmarks and tracking to measure progress.

"We're making real progress on regulatory reform and making it easier to work with DEEP," she said.

"It's time for the Transfer Act to go. It's not delivering on economic development or environmental outcomes."

DEEP's Katie Dykes

Dykes also mentioned the agency's push to replace the Transfer Act with a release-based framework, which 48 other states in the country use.

"It's really time for the Transfer Act to go," she said.

"It's not delivering on economic development and it's not really delivering on environmental outcomes."

Streamlining Government

Lamont has made the streamlining and modernization of state government operations a theme of his administration, with the Department of Administration Services spearheading those efforts.

"We can drive savings for taxpayers, improve services, and send an important message that we can do what you are doing in your businesses," said Geballe, a former IBM executive..

Geballe said the pending wave of state employee retirements—a quarter of the state's workforce is eligible to retire in 2022—was an opportunity to streamline and modernize operations.

"This is about doing what we do better," he said. "We've already launched a number of initiatives to address what we view as opportunities.

Commissioner's panel at CT Business Day, John Biello DRS, Katie Dykes DEEP, Josh Geballe DAS, Glendowlyn Thames DECD
DEEP's Katie Dykes, Josh Geballe from DAS, DECD's Glendowlyn Thames, CBIA's Joe Brennan, and John Biello from DRS.

"We can leverage best practices, we can leverage technologies that have been battle-tested in the private sector for five, 10, 15 years and yield the benefits."

Biello told the crowd modernizing the tax agency's administrative processes was a main priority.

"Taxes aren't easy," he said. "Our biggest initiative is modernizing the way we do business.

"Our job is to make it easier for you, to partner with business, and give you the tools and guidance you need."