GE: Too Little Too Late

When GE and other major employers warned that onerous taxes and financial instability would make it impossible for them to stay in Connecticut, the state’s response could be described as novice at best, similar to a minor league player in a World Series game. The Governor’s office made a huge faux pas when they showcased GE’s competitor’s engine in their final pitch to persuade them to stay.

This lack of seriousness was ill-advised. The prospect that GE’s might leave was continually predicted, and its urgency was apparent to anyone listening to the plain speech of its leadership. Jeffrey Immelt, CEO of GE stated in September: "We want to be in some place where people support job creation, which is attractive to talent, good cost of living, and it is supportive in what a high-tech exporter has to be all about."

Mr. Immelt’s remarks could fairly be described as the opposite of Connecticut’s actual attitude toward business. Over the years, I have seen state leadership enact numerous laws that poisoned the state’s business climate. Having failed to anticipate the consequences of these policies or the precarious financial conditions they effected, the majority party’s response to GE’s decision has been too little and come far too late.

December’s special session was an opportunity to demonstrate Connecticut’s seriousness about changing financial course. Sadly, the opportunity was squandered through halfhearted legislation that did little to convince GE and others that the state was determined to follow a more sustainable fiscal and regulatory path.

Companies like GE are not only concerned about legislation that directly affects them, but also the impact of state finances on their employees and the communities in which they live. The policies that large employers find objectionable also hurt small businesses, risking a further loss of jobs in Connecticut and an increase of out migration. That one of the world’s largest and most prestigious companies has decided to uproot itself from our state is a warning that legislators must take to heart. Either we change Connecticut’s attitude toward business, or risk greater losses in the years ahead.

Senate Minority Leader Len Fasano expressed my view accurately when he stated, "GE … confirms that after the largest tax increase in state history in 2011, GE started its plan to leave the state of Connecticut. After the second largest tax increase in June 2015, GE initiated their formal review to look at other options. This is proof positive that the Democrat majority’s fiscal plans are failures. Until we make structural changes to Connecticut’s budget, I fear that many more businesses will continue to leave this state. Any other conclusion, spin, or rational demonstrates a complete loss of touch with reality."

The loss of GE must serve as a wake-up call for legislators on both sides of the aisle that profound changes to Connecticut’s financial management are no longer merely prudent, but vital to our continued existence a an attractive location for business. A stable and responsibly run company must take the long view of its prospects, and the financial health of its host community cannot but determine whether it continues to do business there. Given the shortsightedness of Connecticut’s tax and spend policies, we should be dismayed, but not surprised, that GE has decided that its needs would best be served elsewhere.

The effects of GE’s move will be felt not only in Fairfield County but throughout the state as the budget suffers the loss of so many high earners, and as GE’s employees sell their homes and move to Massachusetts, bringing their wealth, income, and charitable contributions with them. The time to solve Connecticut’s fiscal issues is now, before other employers large and small, decide to follow GE’s lead.