Republicans press for change as Indiana Tweaks Connecticut With Full-Page WSJ Ad [Courant]

June 11, 2015

Hartford Courant

Indiana is making a brazen play for disgruntled Connecticut companies to relocate to the Hoosier state.

In a full-page ad that ran in Wednesday’s Wall Street Journal, the Indiana Economic Development Corporation pledged support for General Electric Co., Aetna Inc. and Travelers Companies. General Electric last week sent a letter to employees telling them it has assembled an exploratory team to “look for another state with a more pro-business environment.” Aetna and Travelers have also expressed dissatisfaction with the budget, along with other prominent Connecticut companies.

“We offer our support in the wake of Connecticut’s looming tax increases, because friends don’t let friends pay higher taxes,” the ad in the Wall Street Journal states.

Indiana’s governor, Mike Pence, also made a direct pitch to the chief executives of each of the companies.

“Businesses in Indiana grow with confidence, while businesses in high-tax states like Connecticut operate in fear of seeing their piggy banks raided,” Pence wrote in a letter to the CEOs. “I’d love to meet with you personally and share the many ways you can grow your business and create more jobs in Indiana. Our workforce is ready to work for you.”

This isn’t the first time Pence, a Republican, and Malloy, a Democrat, have tangled on policy matters. In March, Malloy briefly banned state-funded travel to Indiana to protest the state’s Religious Freedom Restoration Act, which offered legal protections to businesses that refused to serve gay and lesbian customers. Malloy and others called the law discriminatory.

Pence’s advertising assault on Connecticut’s budget adds fresh fuel to Republican arguments that the $40 billion budget narrowly approved by the legislature last week does significant harm to the state’s business climate.

Republicans press for changes

Republican leaders are pressing for changes to the budget in the upcoming special session of the legislature.

“When folks say it’s already a done deal, I say, ‘no it’s not,”’ Sen. Kevin Witkos, R-Canton. “If we can get in the room and express how destructive those policies are…there is a possibility to effect real change…this is the last shot we have.”

Witkos and his fellow Republicans are hoping to keep the pressure on Malloy and the Democrats in advance of the special legislative session, which has yet to be scheduled. The new fiscal year begins July 1.

“Our key is to ramp it up…keep it into the public mind,” Witkos said. He is hoping lawmakers undo some of the tax increases in bills that provide the structural details for the implementation of the new budget.

Whether that will happen is unclear. House Speaker Brendan Sharkey said Wednesday lawmakers may seek to clarify some of the tax changes.

“To the extent that there are thoughts about the implementation of the budget, as far as what we’re planning and what we’re reconsidering, that’s always open,” said Sharkey, a Democrat from Hamden.

Though Sharkey said that he cannot predict exactly what could change during the special session, he said it “makes a lot of sense” to clarify the new tax burdens that will be placed on Connecticut corporations under a new tax scheme.

“I do think there’s a wide chasm between what’s being projected as the impact on business and what we in the legislature are anticipating,” Sharkey said.

Just when the special session will convene, though, remains unclear; Sharkey said that legislators are still in the process scheduling the session as to maximize the number of legislators available for a vote.

Democrats want to be sure they hang on to the narrow margins that allowed for the budget to pass both chambers. The budget passed 73 to 70 in the House, with 11 Democrats joining 59 Republicans in opposition. Eight state representatives missed the vote, citing reasons that ranged from a death in the family to business commitments. The budget passed in the Senate 19 to 17, mostly on party lines.

Meanwhile Joe Brennan, president of the Connecticut Business and Industry Council, which lobbies on behalf of Connecticut businesses, is planning to meet with Malloy this week to discuss the tax plan.

“The passage of the two-year budget by the General Assembly earlier this week has created a crisis in Connecticut,” said Brennan, in an open letter to Malloy late last week. “The reaction to this budget among members of the business community has been unprecedented in my 27 years at CBIA.”

Republican lawmakers released a letter to Malloy asking to be part of the discussion. “It’s odd that Gov. Malloy would continue on this path of closed door meetings when it is so obvious to everyone that we need to change the way those in power operate in our state,” said Witkos and Senate Republican leader Len Fasano wrote. “At one point in his career, even Governor Malloy realized that.”

Malloy spokesman dismisses Republican request

Malloy spokesman Devon Puglia dismissed the Republicans’ request.

“Sen. Fasano writes another angry letter to our office and releases it to press!” Puglia said. “For months we’ve asked for constructive ideas on paper – and what we got was a bogus GOP budget filled with hundreds of millions in phantom savings that could never materialize. As we have said previously, we are happy to meet with Joe Brennan one-on-one, since he is much more interested in a constructive dialogue about how Connecticut has one of the lowest effective corporate rate in America.”

While the controversy and public debate over the budget continued Wednesday, Malloy traveled to Washington, DC.

“Capitol reporters: On Wednesday, Governor Malloy will be in Washington, DC. He is scheduled to leave in the morning and return in the evening,” read the tersely worded email sent Tuesday night by David Bednarz, deputy director of communications for the administration. Puglia said Wednesday morning that Malloy traveled the nation’s Capitol for meetings of the Democratic Governors Association.

Malloy’s day Wednesday also included a fundraiser hosted by Richard Sullivan and featuring Ken Feinberg, an attorney specializing in mediation and dispute resolution. The fundraiser Wednesday was designed to benefit the Connecticut Democratic party’s federal campaign account. Tickets range from $10,000 to $1,000, according to the invitation.

Also listed on the invitation for noontime fundraiser were Larry O’Brien, Colm O’Comartun, a DGA staffer-turned-consultant who is close to former Maryland Gov. and presidential candidate Martin O’Malley, and DGA finance director Roshan Patel. Tickets for the event were $10,000 for a host; $5,000 for a co-host; $2,500 for a supporter and $1,000 for a guest.

Thursday Malloy is traveling to New Haven for a grand opening ceremony of an agricultural laboratory, and then to Madison to celebrate the 25th anniversary of Shore Line East Commuter Rail Service.

This weekend, Malloy is scheduled to travel to France to attend the International Paris Air show, the world’s largest and longest running aerospace trade show. The event is expected to draw more than 2,200 exhibitors, including more than a dozen from the state, according to the Connecticut Technology Council. The trip is being funded by the state Department of Economic and Community Development; the cost was not disclosed. A Malloy spokesman said Malloy is traveling to France to highlight Connecticut companies and recruit new business to the state.