Joseph F. Brennan last month marked three decades with the Connecticut Business & Industry Association (CBIA), with 5,000 members the state’s largest business group, which he joined in 1988 as a staff attorney. He has overseen CBIA’s public policy operations since 2006 and most recently served as executive vice president of CBIA, before assuming his current role as president and CEO in December 2014. Brennan, 64, earned a juris doctor from the New England School of Law in Boston, and a bachelor’s in political science from the College of the Holy Cross.
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Entering 2019, the Connecticut business community has probably never had less clout at the Capitol than it does now. How did we get here?
I’m not sure I agree. The business community still has a lot of clout. This last election notwithstanding, when you look at any survey of voters, the economy and jobs always comes out No. 1. And because we represent employers and work on economic-competitiveness issues, we have a major role to play. Just because the legislature has shifted somewhat [toward Democrat control] that doesn’t make us less relevant or less important.
CBIA’s 2019 legislative agenda is heavy on state budget recommendations and proposed remedies.
A lot of it is on fiscal policy — trying to put Connecticut on a better fiscal path, and the chilling effect these ongoing budget deficits and large unfunded liabilities have on investment in Connecticut. The other big issue is workforce. Most of our members say they have difficulty finding skilled employees. It’s probably most acute right now in advanced manufacturing — the demands Electric Boat, Pratt & Whitney, Sikorsky, other large OEMs have in their own hiring, and then the hundreds of companies in the supply chains of those firms are all ramping up right now. So the demand for skilled workforce is probably most acute in advanced manufacturing, but I hear it from almost every industry in our membership.
These are well-paying, high-skilled jobs. What has to be done to fill them?
We have to find better ways to communicate to people about the opportunities that await them in very good, high-paying jobs in Connecticut. We have to build a pipeline so that people coming from colleges, community colleges, technical high schools, people returning from the military or even coming out of the corrections system can enter into a pipeline that leads them through training programs into a company.
Did CBIA endorse the recommendations of the Commission on Fiscal Stability?
There were some issues that prevented us from fully endorsing them in the first iteration, largely around tax policy. One of the major components of the first Commission report was a new payroll tax on employers that would raise over $600 million — a 0.8-percent payroll tax on all employers. That was something we were not expecting, and frankly our members were very concerned about that. There were other taxes on business, such as expanding the base of the sales tax, so in all it was close to a billion-dollar [tax] increase on businesses. So we did not endorse the first report of the commission.
But that was amended in the so-called ‘2.0’ Commission report released the last week of November.
That [revised report] was much more in line with our thinking. They eliminated the payroll tax and are looking to reduce some taxes in key areas. [For instance] the personal income tax they originally [recommended reducing] from 6.99 to 6.5 percent; now they’re saying 6.99 to 6.7 percent. So it’s less costly to the state. And they do call for identifying savings in operations of state government. And they call for looking at all the post-retirement benefit costs for state employees — which is difficult to do, obviously.
How does CBIA view the role of the state’s business community moving ahead with a new administration in Hartford whose leader was clearly not the more ‘pro-business’ of the two major-party candidates?
Well, CBIA does not endorse candidates for governor. We’ll continue to present ideas to [incoming Gov. Ned Lamont], to comment on ideas that he or the legislature might come up with, and do what we pretty much do every year — work with the administration and the legislature to promote policies that encourage people that make investments to make investments here in Connecticut. A lot of it comes down to confidence — whether it’s a large multinational making a decision about where to invest, or a single entrepreneur, we want Connecticut to be a location of choice for those investments. It’s been challenging, because of fiscal policy and workforce issues, to get as many of those investments as we would like here.
What do you hear most from business leaders?
What we hear all the time from business leaders is the word predictability. They would like reasonable predictability that when they make an investment, they’re going to get a reasonable return on that investment. But because we’ve had very large tax increases, changes to regulations and things that make Connecticut less and less affordable for them, those are challenges that we have to overcome.
It used to be another state that was called ‘Taxachusetts.’
And it’s not [taxes] on just businesses; it’s also individuals. A lot of people focus on tax policy, but to me it’s more about affordability overall. Connecticut is an expensive place to live, so anything we do that makes it less affordable [poses] a challenge to keep people here that you want to employ in your workforce. On the business side, it’s predictability, it’s affordability and having that talent pipeline that’s so critical. The biggest single differentiator companies have with their competitors or states have with other states is talent. How effective are you at developing, attracting and retaining good talent? That’s what’s going to make your company successful, and that’s what’s going to make your state successful. One reason Massachusetts is doing well economically…
…is that they have a Republican governor.
[Laughs]…is that they’ve been able to leverage greater Boston as a magnet for capital and talent. I went to law school in Boston four decades ago, and at that point there were more people leaving Boston than coming. I go to Boston now and I hardly recognize it for all the growth.
But we have no major cities.
Well, we can’t turn any Connecticut city into Boston or New York, but we can do a lot more with them. New Haven has shown a lot of progress attracting more tech companies. They’ve got their fiscal challenges and other challenges. But there’s a buzz there that wasn’t there ten years ago.
How is CBIA itself doing as a ‘business’?
The economy in Connecticut, adjusted for inflation, has not grown in ten years. The national economy, especially in recent times, has grown at a much greater rate. Now we’re starting to see some better [state] numbers over recent quarters, but we’re still lagging the rest of the nation. So that makes it difficult, when you have mergers and acquisitions and companies relocating out of Connecticut, [for CBIA] to grow membership. Chambers of commerce and others have been struggling with this over the last ten years or so. We’re starting to see more growth now because of tax reform and regulatory reform at the national level, and as the national economy is improving we’re starting to see some signs of growth largely driven by manufacturing. If you had told me 20 years ago that in 2018 the biggest driver of the Connecticut economy would be manufacturing, I would have said you were crazy. But because of these contracts — mostly on the defense side but also on the commercial side — in aircraft and shipbuilding, we’re seeing a lot of growth in that area — not just for those large companies, but for the hundreds of companies in their supply chains. So we’re hopeful we’ll see more growth in Connecticut — and that will help organizations like ours and others.
Why don’t more state lawmakers understand that if unskilled labor were worth $15 an hour, companies would already be paying that?
A lot of it is ideology. Someone said to me once at the Capitol, ‘We used to elect public servants; now we elect advocates.’ If [elected lawmakers] put ideology ahead of what’s good for the state as a whole, then that’s not going to change based on arguments that we or other [business] advocates might make. That’s the real challenge that we face.
If this were Arizona or Missouri, for instance, the state’s largest business group would exercise a lot more leverage — not just with lawmakers, but with the public, too.
A lot of that’s cultural, and it’s not easy to overcome. The encouraging thing for me is that business leaders at all levels are getting more active in policy matters than they’ve been in a long time. We always struggle to get our message out to the general public, and not just to policy-makers. We do feel that the public is generally supportive [of the business agenda]. The challenge is electing people who understand those positions that we take and agree with them. That’s why we’ve gotten a little more active politically over the last few years in trying to elect more people who have economic competitiveness and economic growth as top priorities when they go to Hartford.
Isn’t it time to take the leap and start endorsing candidates?
Well, we do. We have historically endorsed candidates for the legislature — this year we endorsed candidates in about 100 out of 187 legislative races.
I mean for statewide office.
Some [CBIA board members] get nervous about even doing that [endorsements for General Assembly races]. They think we should just be policy-oriented and not politically-oriented. A lot of people [coming into the legislature], their ideology does not lend itself to our argument. So we have become a little more active politically in trying to elect people who are more open to our ideas.
Contact Michael C. Bingham at mbingham@newhavenbiz.com
