The spectacle of two governors making trips into Connecticut with the expressed goal of stealing businesses should have been a wake-up call for elected leaders. Instead, they took the moment to do the dance of denial and congratulate themselves on what a great “business-friendly” legislative session they’d just concluded.
Let’s consider just a few of those accomplishments:
• There was an overhaul of the state’s energy policy. On one level, it purports to be consumer friendly in that it ramps up the use of cheaper natural gas and folds in some hydro. But any relief is way downstream. The real struggle was more about mollifying environmentalists and alternative energy providers than it was about lowering prices. There’s nothing here that anybody can take to the bank today, except for the high-priced alternative energy contracts. Energy costs in Connecticut are still among the highest in the country and reliability remains an open issue.
• The extension of the surcharge on corporate taxes and the extension, albeit limited, of the power generator tax. Certainly the governor is literally correct when he says there were no new business taxes this session. After all, both of these levies were in place last fiscal year. But the key here is the government had promised they would sunset June 30 and then reneged. Business works on certainty and the certainty here is that the legislature can’t be counted on to keep its word.
• And then there’s the decision to move ahead with implementing a major hike in the wholesale tax levied on gasoline and diesel fuels. In what is simply a business killing grab for cash, the legislature cost every business that has to move goods another 4 cents a gallon.
The comparison to Texas is top of mind so let’s go there. In Texas, the state tax on highway fuels is under 21 cents per gallon. In Connecticut, the combination of state gasoline taxes has been about 47 cents. On July 1, it will go up another 4 cents. The picture on diesel is even worse. Texas charges the same rate as gasoline while Connecticut charges more than 51 cents today, going to above 55 cents per gallon July 1. No other state is within a dime per gallon of that levy. Thanks legislature, that’s going to help.
Don’t be confused by all the noise about gun laws chasing jobs out of the state. When companies move, it’s a business decision. And Connecticut’s tax environment is its own worst enemy, followed closely by its nanny state regulatory tendencies.
Whether the invaders from Texas and South Dakota took home any spoils this trip is beside the point. The fact that they see Connecticut as vulnerable says they see the situation more clearly than the folks under the golden dome.
Fish lessons
Quinnipiac’s first poll of the gubernatorial election season shows unannounced candidate Tom Foley leading Governor Malloy by 3 points. It’s so early, that means nothing. What should mean something is the pollsters’ finding that 31 percent of would- be voters think the state’s economy is getting worse and only 20 percent think it’s getting better. Maybe those visiting governors were missing the obvious while trying to snag a corporate whale. They could have gone home with a rich haul of smaller fish — highly productive workers.
