Keys to Connecticut’s Economic Future
The following was first published April 16 in the Waterbury Republican-American.
By John R. Rathgeber
If state lawmakers were looking for any guidance as to what they should focus on in the last few weeks of the 2014 legislative session, three recent events provide some insight.
Two-thirds of Connecticut voters responding to the latest Quinnipiac University poll said jobs and the economy should be the top priority for the state legislature and administration.
The state Department of Labor in March announced that Connecticut gained only 800 jobs in February after losing nearly 11,000 jobs the previous month.
And as April began, news came that New York is significantly reducing its taxes on manufacturers and other businesses in the Empire State in an aggressive effort to attract private sector investments and create more jobs.
Jobs and a stronger economy. It’s what voters want state policymakers to focus on, what Connecticut needs, and what competitor states are moving more quickly to address.
A real commitment to making Connecticut one of the best states in the nation for business is vital to meeting and answering all three of those challenges.
And it’s the reason for a new statewide campaign supported by CBIA, the Waterbury Regional Chamber of Commerce, The Smaller Manufacturers Association of Connecticut, and more than 50 other leading business and professional organizations from across the state. The CT20x17 campaign is specifically aimed at driving Connecticut into the top 20 states for business by the year 2017.
Economic competitiveness is not just a business issue but one that touches every community, every neighborhood, and every family in Connecticut. A competitive economic climate means more jobs, more opportunity, and a brighter future for everyone in the state.
The fact is, despite Connecticut’s many impressive advantages, we unfortunately rank poorly in most national business climate surveys, and that has had a dampening effect on our economy.
Studies such as CNBC’s “America’s Top States for Business” (which ranked us 45th overall in 2013), and Forbes’ “Best States for Business,” (which placed us 33rd in 2013) make it difficult to cultivate and attract the business investments we need to kick-start and grow our economy. They clearly impact relocation and expansion decisions of companies both outside and inside Connecticut.
Over the next three years, the CT20x17 campaign will urge state policymakers to focus on the issues with the biggest potential to improve our economic competitiveness: state spending and taxes, education and workforce development, the cost of doing business, transportation infrastructure, and our regulatory climate.
We will raise issues, promote positive ideas, and encourage lawmakers to support them. We’ll also urge policymakers to continue to support recent initiatives to lower energy costs, improve public education, cut red tape and lean state government operations. And the CT20x17 campaign will examine Connecticut’s annual progress through the lens of those national studies.
What we can’t forget is that Connecticut has recovered only about 50% of the jobs lost during the last recession, at a time when nationally, private-sector jobs have reached pre-recession levels.
The good news is that the turnaround can start now, even as the 2014 session of the General Assembly moves into its final weeks. Lawmakers still have several opportunities to begin making progress by:
- Accelerating the phase out of the 1.5% corporate tax surcharge, making Connecticut more competitive with our neighbors.
- Reducing the heavy unemployment compensation tax burden on businesses by applying some of the projected state surplus to a portion of the interest owed on federal dollars borrowed to keep our system afloat.
- Extending the successful R&D and apprenticeship tax credits to pass-through entities—which include thousands of small businesses and manufacturers in the state.
- Rejecting new mandates and additional restrictions on Connecticut employers that only make it harder for businesses to succeed here and respond to changing economic conditions.
Those changes will bring immediate tangible improvements to Connecticut’s business climate, and demonstrate the state’s commitment to improving its national rankings.
Lawmakers should also adopt a proposed comprehensive study of the state’s tax structure, and make sure that it focuses on supporting economic growth and job creation.
What our state lawmakers do in the next few weeks will send a message not only to Connecticut businesses, but also to businesses and governments in other states, about our commitment to being as competitive as possible.
John R. Rathgeber is president and chief executive officer of the Connecticut Business & Industry Association.
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