New legislative balance brings hope for Connecticut businesses
Over the last decade, Connecticut’s economy has been battered by a deep national recession, followed by a long, slow climb to economic stability.
This recession also dampened the normally optimistic view of the future for many of the state’s residents, evident in the polling and focus groups CBIA conducted throughout the 2016 election season.
But because of the resiliency of Connecticut businesses and their workforces, our companies are competing and winning every day.
As I travel around the state, I’m hearing more positive stories from our member companies in a variety of industries. Many are looking to hire and grow.
Employers are heartened by the hope that the new balance in the state legislature will lead to more bipartisanship, and therefore better policy choices, as they are by Gov. Dannel Malloy’s emphasis on a more predictable and stable fiscal environment for businesses in his Opening Day address to the General Assembly.
That’s why I believe we are at a key point in our economic recovery. We have an opportunity for Connecticut to begin to reach its full economic potential.
This renewed sense of hope is tempered, however, by the many challenges still ahead of us.
Six-plus years after the end of the national recession, Connecticut has recovered only 72 percent of the 119,100 jobs lost during the economic downturn, lagging well behind most of the states in the country and in our region.
The monthly job numbers throughout most of the fall were extremely troubling, with losses totaling over 14,000, although in November we saw a gain of 2,100 jobs.
Our economic growth in 2015 was 0.6 percent, well below the average for New England (1.3 percent) and the nation (2.4 percent).
Some policymakers ignore our positives and say our economy is in awful shape, while others ignore our problems and say everything is fine.
I believe an honest assessment shows an economy with tremendous assets, such as world-class companies and a highly skilled workforce, but one which, for various reasons, is not firing on all cylinders.
The first step toward reaching our economic potential is acknowledging the challenges we face, and the biggest policy issue facing Connecticut and its job-creators is the state budget.
Our ongoing cycle of deficits and big tax increases continues to impair business confidence and has a chilling effect on much-needed investment here.
Businesses look for predictability when making investment decisions and our unbalanced and unpredictable state budget inhibits our ability to grow.
Unfortunately, this unpredictable trend is continuing as the state is again looking at billion dollar-plus deficits in each of the next two years.
What’s clear is that tax increases cannot be an option this year. Additional tax increases will only make the state less affordable and drive more wealth as well as much-needed and investment out of the state.
We need real long-term solutions, not Band-Aids that will exacerbate rather than solve our fiscal problems.
The next state budget must reflect the hard choices on government spending that the times demand.
It must focus on the core, essential services of government and limit spending in other areas.
It must recognize, despite progress already made, that more needs to be done to lean and restructure government so it can deliver essential services more efficiently and cost-effectively.
Policymakers must also make state employee wages and benefits more affordable for taxpayers so those costs don’t squeeze out spending in other critical areas such as human services, transportation, education, and our cities.
Getting our fiscal house in order and allowing needed investments in other areas will help foster innovation and promote growth.
And rejecting costly mandates on employers in favor of policies that will encourage investment here can help overturn many of the current negative perceptions about the state’s business climate.
Voters expect their newly elected state senators and representatives to work together, Republicans and Democrats, and fix the problems that erode Connecticut’s strengths and cast doubt on our future.
By working together and making tough choices, lawmakers will give businesses the confidence they need to invest here, retain and grow good, well-paying jobs, and realize our state’s tremendous potential.
This is a time of great opportunity for Connecticut, and we’re confident the new legislature will seize that opportunity and begin to make our state an economic leader once again.
Joe Brennan is president and CEO of CBIA, the state’s largest business association.
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