🔒Give business leaders a ‘CT to sell’

A lot of attention has been paid lately to Gov. Ned Lamont's efforts to task business leaders with helping sell or boost the state.

Even the Wall Street Journal highlighted Lamont's ability to recruit business executives to be in, or support, his administration.

The April 2 article headlined “Connecticut Bets on Businesses Luring More Businesses,” notes that former Goldman Sachs executive David Lehman, Indra Nooyi, former PepsiCo Inc. CEO, and Jim Smith, Webster Bank's former CEO, are among the private-sector heavyweights Lamont has tapped to help shape the state's economic-development strategy.

He's also hired former Core Informatics and IBM executive Josh Geballe to lead the Department of Administrative Services, and billionaire hedge fund executive Ray Dalio recently announced he will donate $100 million to the state and help raise millions more to support economically distressed schools.

This is all good PR for Connecticut, and it's a smart strategy to have successful business leaders help re-think how the state operates.

However, it will mean very little if the legislature pushes through the anti-business agenda it's been touting so far this session.

Paid family and medical leave. Higher minimum wage. Tolls. Broadening the sales tax. Increasing income taxes on the wealthy. Taken individually, most businesses can absorb these measures. Some private-sector leaders have even supported highway tolling as a way to invest in the state's run-down infrastructure.

Taken as a whole, however, these policies will represent a major cost increase for many employers, especially small businesses. As an example, take a manufacturing company with 35 employees — a few of them making minimum wage — that has a small truck fleet to transport its goods.

It will see higher costs from highway tolls and an hourly minimum wage that would gradually rise from $10.10 to $15. Paid family medical leave, which would apply to firms with a single employee under one bill, could mean the company has multiple workers out for 12 weeks at a time, making it difficult — and potentially more expensive — to find replacements, especially in an industry already facing a major talent shortage.

Business-to-business transactions are exempt from Lamont's proposed sales-tax expansion, though I'm skeptical that will pass muster in the legislature, especially the House, which is dominated by the progressive caucus that also wants to raise income tax rates on the wealthy. Even still, broadening the sales tax will hit local retailers, many of which are struggling for survival given the continued rise of e-commerce.

Gov. Dannel P. Malloy, who passed two of the largest tax hikes in state history during his eight years in office, certainly caught the ire of the business community. But business owners tell me they are even more concerned today about the direction of the state.

The problem with the legislature is that it contains very few business people, so they are detached from the challenges companies face. (Yes, I'm aware Lamont was a small-business owner himself, but he seems to be allowing ideology to drive some of his decision-making.)

Some also view “businesses” only as large corporations that earn billions of dollars and handsomely reward shareholders and executives. While Connecticut is still home — thankfully — to a number of Fortune 500 employers, mid-size and small businesses are the engine of the economy and impacted most by these policies.

Earlier this month, HBJ news editor Gregory Seay wrote about the ramp-up in political activism of the state's largest Realtors' lobby, Connecticut Realtors, which is concerned about the impact the state's economic malaise is having on the housing market. While I don't agree with all their tactics, I did find appropriate a slogan they brandished during last fall's election: “Give us a CT to sell.”

It's the same mantra business leaders now in Lamont's inner circle should be sharing with the freshman Democratic governor and state legislators.

It's not enough to have high-profile executives hawking the state. They need something they can actually sell.