There’s been lots of hubbub lately about Amazon’s decision to open a second headquarters, where it plans to employ 50,000 workers earning an average salary of $100,000.
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There's been lots of hubbub lately about Amazon's decision to open a second headquarters, where it plans to employ 50,000 workers earning an average salary of $100,000.
The announcement excited many government and economic development officials around the the country and sent Connecticut policymakers rushing to the podium to declare our state's intentions to woo the online retailing giant to our hallowed grounds. Local media quoted everyone from Gov. Dannel P. Malloy to Hartford Mayor Luke Bronin and even U.S. Sen. Chris Murphy, who boasted about the state's highly educated and skilled workforce and prime Northeast location.
While Connecticut should make an aggressive push to compete for Amazon's new headquarters, it shouldn't be a government-led initiative. If Connecticut is going to have any shot at competing with major tech centers like New York, Boston, Chicago, Austin or Charlotte, among many other locales, we need to lead with a coalition of top business executives (from blue chip companies to small and midsize firms and startups) that vouch for the state as a great (not good) place to do business.
Even then, Connecticut is a longshot option for Amazon (last time I checked there are still 49 other states in the U.S. that will also be eager to host one of the largest and fastest-growing companies in the world). If policymakers were truly serious about wooing the likes of an Amazon headquarters, they would have spent the last two decades cultivating a business and economic climate that was suitable for job growth and investment. Instead they've built a state government that overspends, over regulates and over taxes.
Connecticut's economy has sputtered in the meantime, recovering only 80 percent of the jobs lost during the Great Recession, giving the state the slowest growth rate in New England (yes, even Rhode Island's economy has performed better).
Adding insult to injury, several high-profile Connecticut companies — Aetna and General Electric — sought out greener pastures for their headquarters locations. Homegrown Alexion Pharmaceuticals — the gem in the state's budding bioscience sector — announced last week it was moving its headquarters to Boston, despite receiving $26 million in economic development incentives from the Malloy administration.
There was also a bit of irony lost on many people: On the day after Amazon announced it would spend $5 billion in search of a new, second headquarters, Malloy unveiled a revised budget that caved to Democrats' demands to increase the sales tax. That's not exactly a welcome mat to the world's largest online retailer (Amazon came to an agreement in 2013 to begin collecting sales tax from online shoppers in Connecticut).
While a sales-tax hike may be off the table now, the message was already sent. Meantime, other tax increases loom as the state continues to grapple with its fiscal crisis.
Let's be honest, Connecticut's business community doesn't have a high degree of confidence in our state policymakers; nor should they. Lawmakers for more than a decade have been unable — or unwilling — to make the hard decisions that will put our state on a more stable fiscal footing.
The Connecticut Business and Industry Association released its “2017 Survey of Connecticut Businesses,” last week, which found that the top four factors hampering business growth and investment in the state are the high cost of living, uncertainty and unpredictability of state legislative decision-making, taxes, and additional business costs from state mandates and regulations — all factors influenced by government.
That's why policymakers should sit on the sidelines while trying to woo Amazon, at least for part of the beauty pageant. Instead, government should convene a group of high-profile business leaders who truly believe in what the state has to offer — and it has plenty — to sell Connecticut and its prime location, talented workforce and high quality of life.
After that, state government can ride in on its white horse, present Amazon with a generous incentive package and hope for the best.