Maybe the candidates for governor can be forgiven for pandering to the public’s anxiety about the declining economy, but their insistence at a forum the other day in Stamford that creating jobs must be the theme of the next state administration was only pointless jabber.
For the only thing state government can do to create jobs in the private economy is to maintain a low-tax environment with decent transportation and educational infrastructure generally. The direct-subsidy approach so often taken by state government in recent years, with subsidies awarded to particular businesses for moving into the state or just moving around within the state, come at the expense of other businesses and taxpayers generally. Indeed, a day after the candidates’ forum in Stamford, Governor Rell announced that the state would pay a waste management company $3 million toward its $5 million cost of moving from East Hartford to Windsor and adding 40 jobs within a year, a subsidy of $75,000 per new job.
This isn’t economic development; it’s political patronage. Other companies that stay in Connecticut or expand here will not be getting it. When government picks winners and losers in the economy like this, there are always infinitely more losers.
In any case, rebuilding private employment in Connecticut is at best a long-term project, something that will take years even when done well.
By contrast, as Connecticut faces a likely revenue shortfall of 15 or 20 percent for its next state budget, the next governor, taking office in January, will have all of one month to propose a budget to the General Assembly and then five months to get it passed. Just sustaining the basics of state and municipal government will require that profound choices be made quickly, even as any plan for encouraging job growth will not help that budget at all.
At least the Republican candidates for governor are starting to talk about policy changes that could economize substantially, like repealing binding arbitration of public employee union contracts, curtailing public employee pension benefits, and privatizing some government operations. Politically implausible as such changes may seem on the assumption that Democrats keep control of the General Assembly, implausibilities are the only solutions short of another monster, economy-destroying, population-exiling tax increase such as was imposed under Gov. Lowell P. Weicker Jr. with the state income tax in 1991. Even the governor candidate endorsed by the Democratic state convention, former Stamford Mayor Dan Malloy, remarked in a newspaper interview the other day that he is prepared to veto budgets passed by the legislature’s Democratic majority.
State government initiatives may be nice and nicer insofar as they are financed by changing policies and liquidating programs that don’t work, but it will be a long time before Connecticut can spare even a moment to think about anything besides how to cut back.
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Chris Powell is managing editor of the Journal Inquirer in Manchester.
