Governor Ned Lamont was in a bullish mood as he addressed 350 business leaders from around Connecticut at the state Capitol this week.
Standard & Poor's had just upgraded the state's bond rating—the first upgrade by a rating agency in 18 years—from "stable" to "positive," and Lamont was ready to share the news.
"This is a message around the country that this is a fresh start for our state," he told the 2019 Connecticut Business Day crowd March 20.
"We're going to have to hold the line on our spending and hold the line on our fixed costs."
Lamont proposed his first budget in February, a two-year plan he said is "honest and balanced, on time, and focuses all our energy on job creation and getting this state moving again."
"My focus, as the first governor to come from the business world in eons, is to work with CBIA and you, and do everything we can with this budget," he said.
Controlling Fixed Costs
Lamont said his first task is controlling the state's growing fixed costs, which he called "a glaring risk."
"Our pension obligations, our healthcare costs, our bonded indebtedness were going up while our revenues were not," he said.
"We have to address our fixed costs. We're sitting down with our friends from labor and I'm confident we can get things done on things like state employee and retiree healthcare."
Lamont says he wants to put the state on a debt diet, only borrowing for projects that help grow the economy, including investments in education, workforce development, and transportation.
The difficulty, he said, will be convincing lawmakers who want that "one special project" for their district that "the gravy train has ended."
Lamont said he can't address the state's fiscal issues without the business community's support.
"I'm going to need some of the folks in this room, if you're with me, to stand up on this," he said.
Lamont acknowledged that some of the policy proposals he was pushing this year, including paid family and medical leave and raising the hourly minimum wage to $15, were unpopular with businesses.
"I know that the minimum wage and paid family leave is probably not a home run in this room," he said.
"But I don't need any group or any party saying, 'I'm out of here,' 'over my dead body,' 'just say no' when it comes to those two bills," he said.
"Stay at the table. Just say 'maybe.'
"If I have Republicans at the table and moderates at the table and progressives at the table, I've got a little more leverage.
"If one party says 'I'm out of here, I'm not going to be involved,' I have a very different negotiation."
Live text-based polling of the Business Day audience revealed broad concerns with the legislature's focus this session on workplace mandates and increasing the size and cost of government.
For instance, 27% of the audience said business costs driven by mandates were the main factor hampering growth in Connecticut, while 21% cited taxes and 15% the state's high cost of living.
Other live polling results:
- What is the greatest advantage to running a business in Connecticut? Quality of life (44%); proximity to customers (18%); skilled workforce (18%).
- What is your top policy concern this session? State's fiscal challenges (44%); economic development (17%); healthcare costs (12%).
- How could business tax hikes impact your company? Cut workforce, hiring plans (36%); consider moving to another state (21%); cut employee benefits (15%).
- How will paid FMLA affect your business? Added costs, administrative burdens (51%); no impact (16%); lost productivity (12%).
CBIA president and CEO Joe Brennan told business leaders engaging with lawmakers was critical, urging them to ask legislators to focus on economic growth and job creation.
"We're certainly not where we need to be so what the legislature does this year is as important, or more important, than in any other year," Brennan said.
"It's about not adding to the cost of doing business, not adding administrative burdens, not putting mandates on business that are going to make it more difficult to do what we need to do—and that's grow.
"We're not going to solve Connecticut's fiscal problems without economic growth."
“Legitimate concerns among #smallbiz about #paidFMLA,” CBIA’s Joe Brennan tells reporters. “We must look at ways of reducing the cost of doing business in Connecticut, not adding to it.” #ctbizday pic.twitter.com/SXY8OgPNCd
— CBIA (@CBIANews) March 20, 2019
Christopher Gessay of Tolland-based Accu-Rite Tool & Manufacturing said he was growing increasingly frustrated with the state's growing mandates, including the paid FMLA proposals.
He said his small company does all it can to find skilled workers, but if one employee takes 12 weeks of leave, he won't be able to find a temporary trained replacement for that period.
"I feel that's impossible," he said.
Julie and Evelyn Grey of Wallingford-based Grey Staffing said the discussions around paid FMLA and other mandates made them realize the importance of paying attention to what happens at the Capitol.
"Some of this doesn't sound very fair," Julie Grey said.
Lamont told Business Day attendees that workforce development—including addressing the skills gap—and fixing Connecticut's aging transportation infrastructure were the state's two most important economic issues.
"I've got to make sure we have the talent base we need and that you have the talent you need so that you stay right here," he said.
"We're getting all the university presidents together with all the major business leaders, trying to do a better job in terms of making sure we are training people for the skills you need right now, and the skills you think you're going to need over the next five to 10 years."
I've got to make sure you have the talent you need so that you stay right here.
Max McIntyre, a former aerospace executive now working as vice president at 20/20 Facility Services Corp. in Farmington, supports more expansion and better promotion of the advanced manufacturing programs offered in community colleges.
Jim Spafford of Manchester Adult and Continuing Education called for workforce development programs for the smallest of manufacturers—those with 30 or fewer workers.
Lamont's proposed budget includes two options for tolling highways—trucks-only and all vehicles—and he has spent the last few weeks advocating for tolls to fund transportation investments.
He told business leaders he understands why people are skeptical about tolls, why "there's a lack of trust in government."
"It's really not 'here we go again,'" he said.
Lamont said he understands why people are skeptical about tolls, why 'there's a lack of trust in government.'
"I don't think I have to convince anyone about the need to invest in transportation. The only issue is how to pay for it.
"I've got to give you confidence the money is being spent for what it was intended."