A cornerstone of Gov. Dannel P. Malloy’s economic development policies — providing grants, loans and tax breaks to companies that add or retain jobs in the state — has left Connecticut vulnerable to bullying and blackmail.
Get Instant Access to This Article
Subscribe to Hartford Business Journal and get immediate access to all of our subscriber-only content and much more.
- Critical Hartford and Connecticut business news updated daily.
- Immediate access to all subscriber-only content on our website.
- Bi-weekly print or digital editions of our award-winning publication.
- Special bonus issues like the Hartford Book of Lists.
- Exclusive ticket prize draws for our in-person events.
Click here to purchase a paywall bypass link for this article.
A cornerstone of Gov. Dannel P. Malloy's economic development policies — providing grants, loans and tax breaks to companies that add or retain jobs in the state — has left Connecticut vulnerable to bullying and blackmail.
Particularly in the wake of General Electric's headquarters move to Boston, and Aetna's pending move, probably to New York City, companies now see an opportunity to demand a ransom in order to stay or grow in the state.
The latest example is Dominion Energy, which suggested that it might close its aging Millstone Power Station in Waterford if lawmakers didn't adopt a bill giving it a new, more lucrative way to sell its power.
The Millstone proposal was one of the most controversial this legislative session and was declared dead at one point. That prompted a Dominion lobbyist to warn that the company would reassess the plant's future if it didn't get its way.
He even alluded to Aetna's recent headquarters announcement as a need for Connecticut to support its only nuclear power plant, which faces some economic headwinds, produces 59 percent of the power consumed by in-state utility customers and employs more than 1,000 workers.
Shortly after Dominion's comments, the complicated bill — which could alleviate or exacerbate Connecticut's already high energy prices, depending on whose analysis you believe — was revived and passed by the Senate.
Although the bill failed to get through the House, the power exerted by Dominion should be a concern to all taxpayers, particularly smaller businesses that don't carry the political heft of a large employer.
While we understand that corporate greenmail has become a hallmark of most states' economic development strategies, the Malloy administration's overreliance on providing companies incentives in exchange for jobs promises has made Connecticut vulnerable to bad deals. (To be fair, Millstone wasn't asking for incentives, but it was asking for a new regulatory structure that would benefit its bottom line.)
The strategy, which has failed to stimulate Connecticut's slow-growing economy, is really meant to compensate for a poor business climate created by years, decades even, of fiscal mismanagement and bad policymaking.
If the state doesn't get its fiscal house in order and pass other pro-growth policies the problem will only get worse.
Tolls are inevitable in CT
Connecticut lawmakers decided not to bring back tolls to Connecticut's highways this legislative session, but it will only be a matter of time before drivers have to pay to use the state's highways.
The state House of Representatives last week debated for more than an hour a bill that would allow tolling in Connecticut, but failed to garner enough support. Specifically, the bill would have required the state Department of Transportation to craft a plan to establish tolls, but didn't guarantee their implementation.
We supported the measure because we think toll revenues are needed to remedy Connecticut's aging transportation infrastructure and a special transportation fund that is projected to become insolvent by 2020.
House Republicans raised the biggest concern about the bill, arguing that Democrats would use toll revenues to help fill holes in other parts of the budget.
We share similar concerns, as does the broader business community, which is why any proposal to add tolls to Connecticut's interstates must be accompanied by a legally binding promise from lawmakers to use those funds strictly for maintaining roads, bridges and highways. Such a constitutional “lockbox,” however, must be approved by voters directly and the earliest that could happen is in 2018.
We'd also favor adoption of a strict spending cap as well to further restrain lawmakers' insatiable spending habits.
In the meantime, there is no harm in preparing a tolls plan for the state. If and when a strict lockbox is adopted, Connecticut should be ready to act.
In particular, the state needs to collect more revenues from out-of-state drivers who use our highways but don't help pay for them.
That's why we think tolls should be placed at our borders, rather than in central Connecticut. Let's have commuters from New York and Massachusetts help foot our transportation bill.
