Fasano Seeks Special Session As GE Will Decide On Potential HQ Move This Year [Courant]

September 11, 2015

Hartford Courant

The chairman of General Electric Co. said Thursday during a TV interview that the company would decide where to locate its headquarters by the end of the year.

Chairman Jeffrey Immelt told CNBC that deciding whether to move its headquarters from Fairfield, currently under review by a committee, is an important decision.

“We’ve been there for 40 years, so we would never do anything like this carelessly or casually,’’ Immelt said during an interview in New York City. “It’s the kind of thing you only think about every 40 years. You want to make sure you get it right.’’

Immelt did not say GE would leave Connecticut, where the company moved its headquarters in the early 1970s, from Schenectady, N.Y. Earlier this summer, Immelt had written a memo to fellow GE employees that said the company was looking at the options of moving to a state with ” a more pro-business environment.”

When asked on CNBC whether the company would move from Connecticut, Immelt did not answer directly.

“You want to be someplace where people support job creation, where it’s attractive to talent, good cost of living, and that is very supportive of what a high-tech exporter has to be all about,” he said on CNBC. “It is a global battle that we are in, and we need people who are on our side.’’

Immelt’s comments prompted Senate Republican leader Len Fasano to again call for a special legislative session to reconsider corporate taxes — including the “combined reporting’’ method of calculating the corporate income tax that GE has sharply criticized.

The reporting method, already used by some companies, becomes mandatory at the start of 2016. It would affect corporations with operations in multiple states.

Fasano had already called for such a session last month, but was rebuffed by Gov. Dannel P. Malloy and Senate Democrats. Malloy’s spokesman said Thursday there are still no plans to call a special session.

“Clearly, GE was not bluffing in June when they said proposed tax hikes in the state budget were making them seriously consider whether it makes any sense to continue to be located in this state,” Fasano wrote in a letter to Malloy and legislative leaders. “They were not speaking in hyperboles. … Now Connecticut is on the brink of losing one of our state’s biggest assets and crowning achievements.

“If you call a special session now, we can send a message together, not just to GE, but to all businesses, that we are committed to a strong business community … We need to rethink the way our state treats businesses of all sizes. We need to rethink the unitary tax, tax credits and loss carry-forwards.

General Electric has about 800 headquarters employees in Fairfield and 5,700 employees in total in Connecticut, mostly with GE Capital, which is largely being sold. The company reissued its statement Thursday about any plans to move, saying it formed a committee to assess the company’s options.

GE complained publicly about the state’s business taxes in June. Since then, 11 governors have visited GE headquarters in Fairfield, including Malloy. New York Gov. Andrew Cuomo, a Democrat like Malloy, visited the headquarters in July to talk to top executives. Published reports have also said the governors of Texas and Georgia have reached out to GE.

“We would like them to remain in the state,” Malloy has said. “We understand it’s a competitive situation, as it is with many of our large employers.” When asked if the state has offered an incentive package to GE, Malloy responded: “If you want to call it a package, you can call it a package. We’ve indicated, in general, and in some cases specific, terms what we thought we could do.’’

GE, in a rare public statement about the state budget, criticized a plan by Malloy and legislative Democrats to increase business taxes by more than $700 million over two years. Several weeks later, in a special session, the legislature rescinded $178 million of nearly $1.5 billion in overall tax increases.

Fasano said that the loss of GE, one of the largest and best-known companies in the world, would be a blow for Connecticut.

“The landslide that is going to come from GE leaving will be measured in billions and in decades,’’ Fasano said. “It is something that will be felt by thousands of families and will have a damaging and vast ripple effect across the state for years to come. Our state will see a huge loss in revenue as a result, and less income will have a drastic impact on everything from social services to transportation to education.’’