On business, Connecticut craves climate change

Joseph McGee, of the Business Council of Fairfield County

The CT Mirror

Joseph McGee, of the Business Council of Fairfield County

A business survey released Friday reinforces the image of Connecticut companies as ripe for poaching: One in three report being enticed with relocation offers, and nine in 10 say the economic climate here falls short of that in other places.

The annual survey by the Connecticut Business and Industry Association comes as the new state Commission on Economic Competitiveness begins assessing a business climate regularly described as dismal in national ratings.

“The challenge for us is why,” said Joseph McGee, co-chairman of the commission. “Is it taxes? Location? Housing costs? Regulation? What really is it that has soured you on the Connecticut business climate? That is really the critical question to address.”

The commission was created as a permanent panel during a one-day special session June 29, when legislators returned to Hartford to roll back a portion of the tax increases adopted weeks earlier. It held its organizational meeting Thursday.

Joseph F. Brennan, president of the Connecticut Business and Industry Association

CTMirror.org file photo

Joseph F. Brennan, president of the Connecticut Business and Industry Association

Unemployment is down and the state has recovered most of the private-sector jobs lost in the recession, yet its financial outlook is uncertain, growth is slow and its business reputation is toxic.

“It’s very hard to change the tone,” Catherine Smith, commissioner of economic and community development, told the commissioners, who include Joseph Brennan, the president of CBIA. “It’s very hard to turn the conversation to a positive.”

Brennan replied that the state’s problems are deeper than negativity.

The CBIA survey, conducted for the past 15 years with the accounting firm of BlumShapiro, actually presented a mixed picture: 85 percent of businesses turned a profit (63 percent) or broke even (22 percent), one of the strongest results since the recession.

Thirty-two percent of respondents said their companies were growing, while 50 percent reported “holding steady.”

But the survey, which arrived in the e-mailboxes of CBIA members as General Electric and Aetna were loudly objecting to tax increases, also drew angry comments at the General Assembly and complaints about the state’s hostility to business.

“We did get a few back in red crayon,” said Peter Gioia, a CBIA economist. “There were certainly people who were very agitated with what was going on.”

Of the businesses reporting being recruited to move, 25 percent said they were planning to move, while others intended to remain in Connecticut, but expand elsewhere.

Respondents gave the state’s high costs, including taxes, and an anti-competitive business climate, as reasons to look elsewhere. Three-quarters said Connecticut’s business environment was worse than that in other northeast states, and 91 percent said it fell short of the rest of the country.

“The overriding theme of this year’s survey is the need for state lawmakers to further engage business leaders to create a more business-friendly climate in Connecticut,” said Andrew Lattimer, a BlumShapiro partner.

The survey was sent to about 5,500 businesses in June and July. It had a 10.6 percent response rate.

McGee, the vice president of the Business Council of Fairfield County, said the Commission on Economic Competitiveness must probe deeper.

“The question is why, and what can we do about it?” he said.

McGee and his co-chairman, Rep. William Tong, D-Stamford, said they accepted the posts after a blunt two-hour meeting in a Hamden diner with the legislature’s top leaders, House Speaker J. Brendan Sharkey of Hamden and Senate President Pro Tem Martin M. Looney, both Democrats.

“This was not an easy assignment to take for either of us,” Tong said.

McGee said they sought and received assurances that the commission was a priority for the leaders, who will address the panel at its next meeting.

The commission members were appointed by legislative leaders of both parties.

Appointees to the commission

House Speaker J. Brendan Sharkey, D-Hamden, appointed Rep. William Tong, D-Stamford, as co-chair; Rep. Cristin McCarthy Vahey, D-Fairfield; Jeffrey L. Hyde, senior state tax counsel at IBM. Senate President Pro Tem Martin M. Looney, D-New Haven, appointed Joseph McGee as co-chairman; Ellen Shemitz, executive director of Connecticut Voices for Children; and Rodney Williams, a New Haven ward leader.

House Majority Leader Joe Aresimowicz, D-Berlin, appointed Lori Pelletier, the leader of the Connecticut AFL-CIO. Senate Majority Leader Bob Duff, D-Norwalk, appointed Steven Glazer, an economist.

House Minority Leader Themis Klarides, R-Derby, appointed Seth Harold Ruzi, a vice president and associate counsel at Starwood Hotels and Resorts. Senate Minority Leader Len Fasano of North Haven appointed Heather Somers, a business owner and former GOP nominee for lieutenant governor.

By statute, Brennan, Smith and Kevin Sullivan, the commissioner of revenue services, also are members.

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