Theater Versus the Real World

August 20, 2009

During the past three weeks, I joined Senate and House Republican leadership to meet with small business owners. They told us that the 30% surcharge on business profits that majority Democrats propose to stretch over two years would devastate their bottom lines.

Kris Lorch, President of Alloy Manufacturing in Bridgeport, said she has already had to cut her staff and remaining employees’ hours and is considering moving to another state where running a business is much cheaper.

John Szalan from EDCO Industries in Bridgeport explained that Connecticut is so expensive that he is facing serious competition from surrounding New England states, as well as other countries. He could greatly increase his profits if he were to shut down his business and farm out the work to other states, an option he will consider if new tax increases are passed.

Charles Chiusano, President of Avant Business Services in Stamford, considers his employees family. Unfortunately, this downturn has forced him to ask some employees to take pay cuts and furlough time. He does substantial business in New York and other states, and if his remaining small profits are taxed further, he would have to move his business out of state.

Mike and Chris Ann Allen, Danbury Square Box Company owners, told us they can keep their fourth-generation Connecticut business in Connecticut only by reducing staff, energy costs, supplies, benefits, and overtime. Another business owner took out a second mortgage on his home to continue paying his employees’ 401 k plans.

Clearly, these tax increases could be the tipping point for many of our state’s businesses and families. Unfortunately, many in the majority and special interest groups still do not get it. Last week, paid lobbyists dressed as billionaires appeared at two of these companies to ridicule Connecticut business owners – our state’s true job creators. Not only are these theatrics childish, but they are downright insulting.

The reality is that we are in the midst of the most severe recession since the Great Depression, and Connecticut has maxed out its credit card. Connecticut is facing a deficit of more than $8 billion over the next two fiscal years and still does not have a budget. In the past two years, 26,000 businesses have closed, 7,000 of them this year!

Supermajority leaders believe our budget impasse requires tax hikes on already overburdened small businesses. Like Kris, John, Charles, and the Allen’s however, most in Connecticut agree that tax increases are the wrong choice during these “worst” of times. They believe supporting small business should be our top priority in Hartford by revising unfriendly business policies that exacerbate job losses.

House and Senate leaders should visit their local businesses, their job creators, for a reality check. If they take the time to make a personal visit to the real world of work, they will clearly see that these businesses are frightened, that they are struggling simply to stay alive.

Spending a day in the world of a small business would convince them that a new biennial budget should encourage job creation and retention. Indeed, the structure of the new budget will decide whether Connecticut will regain its economic health and if our small businesses will be able to survive.