State business community seeks ‘structural’ changes from legislature

January 25, 2016

Record-Journal

Area business leaders told state lawmakers Wednesday they want to see changes in the budget-making process to provide needed predictability to stay competitive.
Several businesses responded to last week’s news that GE was leaving the state for Massachusetts partly because of the state’s tax policy and high debt. Others acknowledged GE’s departure also included a branding change in a more mobile and higher-skilled environment.

Lawmakers fielded questions about the state’s business climate with about 300 business leaders Wednesday at a forum in North Haven in advance of the legislative session beginning Feb. 3.

“The budget and predictability in the budget is paramount in the business community’s mind,” said Tony Rescigno, president of the New Haven Chamber of Commerce. “The business community is looking for stability. We want to know how we’re going to compete with other states and when will Connecticut get its financial house in order?”

Rescigno doesn’t judge the state’s tax and debt issue on what’s happened with GE.

“I judge it by what’s happening with the small businesses who are leaving because of the high cost of doing business,” Rescigno said. “They have tried to stay up on conditions in Connecticut but they’re not expanding or hiring. The cost of doing business is what drives business.”

Kevin O’Rourke, owner of Fish Window Cleaning in Wallingford and chairman of the board of directors for the Quinnipiac Chamber of Commerce, said he’s been fortunate to experience 20 percent growth in his commercial and residential business last year.

“I don’t think things are nearly as bad as they say,” said O’Rourke, who did not attend the forum. “We did over 1,000 homes last year.”

O’Rourke recalls in 2009 when the phone rang, it was a client canceling an appointment or calling to scale back on cleaning services. Last year was a significant improvement on that.

However, O’Rourke said he is still concerned about the challenges facing other small businesses that are leaving the state. He acknowledged he can’t pick up and leave, but he has heard from others who can no longer stay.
“A lot of these legislators haven’t run a business so they don’t get it,” he said. “Something has to give.” O’Rourke said he already pays his workers above minimum wage, but a mandated wage increase forces him to increase salaries to attract quality workers.

Large companies like GE and Bristol Myers are in a position to put themselves out to bid, he said.

“They can play with other states and get tax deductions,” O’Rourke said. “I can’t do that.”

State Sen. Leonard Fasano is a firm believer that GE’s departure to Boston is a direct result of the state’s tax and budgeting policies based on an email GE’s chief executive officer sent a day after a vote to raise taxes.
But Democratic lawmakers have said GE and Bristol Myers, which is moving to Cambridge, are rebranding themselves in more mobile and technologically sophisticated environments and both planned to leave the state for several years.

Democratic leaders have called on the business community and public to resist buying into negativity about the state’s economic health.

“Those who would seek to paint GE’s departure as an economic referendum should have their motives examined very closely,” Senate President Martin M. Looney, D-New Haven, stated after last week’s announcement. “The 16 Fortune 500 companies that still proudly call Connecticut home — a number that places Connecticut by far as number one in the nation for most Fortune 500 headquarters on a per capita basis – will continue to prosper here, as will the new businesses that move to our state every single day.”

“It’s absolutely clear the Democratic leadership doesn’t want to come to reality over why GE left,” Fasano said.

“Connecticut doesn’t have a path to get out of debt. Massachusetts taxes have gone down in five years. We have gone from a $3 billion deficit to $4 billion in 2017.”

Fasano and Rescigno said business owners want to see $47 billion placed in an infrastructure lock box and not put back into the general fund. Fasano said they want to eliminate an unemployment tax that still has employers paying $5,000 to $10,000 from 2008.

Fasano’s plan also calls for negotiating union contracts, closing the Connecticut Juvenile Training School, and borrowing less.

“There is no real end to this in sight,” he said. “It’s very tough to do business.”

Rescigno, of the chamber, believes lawmakers on both sides of the aisle are finally listening.

“I’m getting the feeling these legislators are finally understanding,” Rescigno said. “This is a subject that is not going away.”