Republican gubernatorial candidate Tom Foley says he wants to put the onus on state government to make regulations more timely and cost-effective for businesses.
But the main reason he says voters should choose him over Gov. Dannel P. Malloy this November is because Connecticut’s economy has struggled to recover during the last four years.
Foley is running on a pro-business mantra. If elected, he said he would change the regulatory environment where permit applicants no longer have to wait for enforcement agencies to make decisions at their leisure.
From a tax standpoint, Foley doesn’t see a major issue with the corporate tax structure in Connecticut, but he said some individual taxes are excessive and driving people out of the state.
The big issue with Connecticut’s business environment, Foley said, is that Malloy’s messaging comes across as anti-business. While tax incentives and state investments have their place, regulations like paid sick leave send the wrong message about the state’s attitude toward the private sector, Foley says.
If victorious in November, Foley said he would leave untouched many of the major projects started under Malloy, like Bioscience Connecticut and CTfastrak. However, the state would take a different approach to spending, where projects like these would be judged by their return on investment.
Hartford Business Journal sat down with the Republican candidate to discuss his policies’ impact on the business community.
What are your top three initiatives to make Connecticut more business friendly?
We have to get control over the fiscal situation. We have to get control over spending, which this governor has failed to do.
As a result, he had the largest tax increase in the history of the state in order to pay for spending. He still has no plan to reduce spending.
Second, is that this governor with the legislature has mandated a lot of things on businesses. That has driven a lot of employers out of state and driven some employers into bankruptcy.
The notion of mandating things on employers from a legislature that doesn’t really understand or seem to care about the business community or job creators has to end. We simply have to have an attitude change that the state needs to support the business community and employers and not see them as an ATM and a political piñata for career politicians.
Then, we need to figure out ways to make Connecticut a more accommodating place for employers. One of the things I intend on doing is a Red Tape Review. We’ll look at the regulatory environment, which I think under Gov. Malloy has been overzealous.
Click here to read HBJ’s sitdown interview with Foley’s opponent, Dannel P. Malloy.
What will your Red Tape Review entail?
We’ll get rid of the business entity tax, which doesn’t sound very big, but I think sends the wrong message and is a burden to people who are starting up businesses, or run very small businesses.
A lot of the biggest complaints employers have about regulations aren’t the regulations themselves but the process and difficulty and time frames for complying with certain regulations. There is no sort of time frame associated with it when the permit must be granted, so these things go on forever and ever.
I would put the burden on the grantor of the permitting process to meet a time frame. So, with a wastewater discharge permit, I don’t know what a reasonable time frame is for a state agency to make a determination on whether it is permitted or not permitted, but whatever that time frame is, if it is six months or even a year, that time frame is set. If the regulatory agency hasn’t determined that answer is no, then that answer is yes.
The legislature already has started talking about overhauling the tax structure over the next two or three years. How would you shape the state’s tax system?
Most of the businesses I talk to don’t complain about our corporate tax rates. I don’t think our corporate tax rates are driving people out of state, but our individual tax rates and some other aspects of our tax code as it applies to [individuals] are driving people out of state and are indirectly driving jobs out of the state.
One of the costs that is very significant for businesses is the cost of energy and electricity and fuel. As a result of taxes and mandates on renewable sources of energy, those costs are quite a bit higher than they are even in our neighboring states in some instances. That is like a stealth tax.
One of the frequent complaints from companies in the city of Hartford is they shoulder a disproportionate tax burden because residential property taxes are low and nonprofits — which are significant property owners in the Capital City — don’t pay property taxes at all. How would you ease the tax burden on Hartford businesses?
I would not propose a tax on nonprofits to cover that cost.
As a tax reform initiative, we should look at broadening the tax base for collecting revenues to support these communities. For example, you could take part of the sales tax that is collected statewide and apportion part of that to the cities to cover these costs.
Connecticut is a top 15 state in state government spending. You have talked about keeping spending flat for two years, but do you have plans to cut costs?
Based on the way Connecticut accounts for government costs, [keeping spending flat] is a reduction.
What the government does every year is they take a current services budget, and they ask every department, ‘If you were to provide the same level of services [next year], what would it cost?’ So, they boost it up 7-8 percent.
Gov. Malloy, when the current services budget was released, he cut it back 2 percent, and he would say, ‘We cut! We cut!’ but really it is a 5 percent increase.
I’m talking about holding it flat, so that would be a 7 percent cut under current services, so that is a very significant reduction compared to what this governor is doing.
Gov. Malloy has instituted some aggressive business assistance programs like First Five and Small Business Express. What would these programs look like under you?
There is a role for certain types of incentives to help create jobs and help support businesses. Most of them are typically focused on smaller businesses.
Gov. Malloy has ramped these things up and [provided most of the incentives] to larger, profitable organizations that are probably going to do whatever they are going to do anyway whether the state of Connecticut is providing an incentive to do it or not. I call it corporate welfare.
The XL Center in downtown Hartford is aging, and there have been calls for a major overhaul of $200 million or more to make the arena viable again. Is that a worthy state investment?
Whether it is a baseball stadium or an arena or an exposition hall or a bridge or a road or some other kind of infrastructure, you really have to look whether that is good public investment, whether it is going to create economic value going forward.
A lot of government leaders have lost sight of the difference between spending and investing, and I want to make sure as governor that we are investing and providing long-term economic value for citizens.
If you spend money and build an arena and create 1,000 jobs for two years while you build the arena, then you haven’t created economic value. It is just gone.
But if you take those same 1,000 jobs for two years and build a bridge that allows 30 minutes off people’s travel time, then you have created economic value.
That is more time those people can spend with their families, more time that they can work, and a broader circle that an employer can draw from for their workers.
So, there is room to invest money in arenas, but it just has to be the right one?
Sure.
