After more than three months of traveling the state to meet Connecticut businesses on a jobs tour, Gov. Dannel P. Malloy is setting his sights on a special legislative session next month that he said he hopes will bring swift action to improve the state’s business climate.
Malloy, in an interview with the Hartford Business Journal, said his administration will be proposing a multifaceted jobs plan concentrating on workforce development, marketing, small business initiatives and modernizing and revitalizing the state’s economic development programs.
A second “First Five” program could be among the proposals, Malloy said.
Malloy said he plans to wrap up his jobs tour by next month and hold the special session in October, although no official date has been set.
A jobs summit will also be held in the coming weeks.
Malloy said he would like to see a “quick” session that will muster bipartisan support around proposals that will be “easily understood and accepted.”
“I think there will be a number of proposals we make that are practical things that other states have done, or that we’ve talked about doing but never got around to doing in the state,” Malloy said in the interview. “What’s important is that the legislature and executive branch be focused on doing that which is necessary for job creation and retention. That is the whole concept behind what will be our suggestions and what I hope will be legislative action.”
As Malloy moves toward his special legislative session on jobs, Connecticut is experiencing severe economic headwinds.
The state’s economy has lost jobs in three consecutive months since May and the unemployment rate remains stubbornly high at 9.1 percent, mirroring the national rate.
And there still remains a lack of confidence from the business community.
According to a survey released last week by BlumShapiro and the Connecticut Business & Industry Association, 75 percent of employers say they have a “somewhat” or “very negative” view of the state’s business climate, blaming taxes and fees, state government actions, and the cost of doing business as their chief concerns.
John R. Rathgeber, president and CEO of the CBIA, said he is encouraged by the upcoming special session on jobs, but he said it must promote policies that spur private sector investment.
And while state programs like Malloy’s “First Five” initiative have a role in economic policy, creating a stable business environment that makes businesses comfortable investing their own money in Connecticut — without reliance on state aid — needs to be the goal, Rathgeber said.
“I think it’s very encouraging he’s calling a special session and trying to create a partnership between the state and business community,” Rathgeber said.
The CBIA will be putting forward an agenda for the special session that will include suggestions related to regulatory reform, changes to the state’s jobs training system, and state tax credits.
To spur private sector investment, for example, the CBIA will urge the removal of the 70 percent annual cap on R&D and fixed capital tax credits.
In terms of his jobs tour, Malloy said he has visited about 50 companies so far, ranging from large manufacturers to one-to-two-person startups.
And one of the consistent concerns he said he has heard from business leaders is related to workforce development and what Malloy says is a disconnect between the state’s education system — pre-kindergarten through college — and the skills Connecticut’s job market requires.
“The problem is even more acute than I imagined and certainly one of the constants I hear is that we are not preparing the workforce for the job market,” Malloy said, adding that his administration took steps during the last legislative session to begin to address the issue.
Malloy said the problem cuts across various industries, and not just manufacturing.
“It ranges from engineering and advanced engineering degrees to manufacturing and everything in between,” Malloy said. “On the emerging technology and entrepreneur side, we have to build something that is more supportive of their undertakings as well.”
Malloy acknowledges that Connecticut is a high cost state, but he says it is also extremely efficient, productive and well-trained compared to other states. He says energy costs are too high on a comparative basis, but he thinks something can be done about it.
His goals for the special session and beyond is to focus building up Connecticut’s economic strengths, which include aerospace, precision manufacturing, health care, insurance, and banking and finance.
Malloy said he is not as bullish on lower-end manufacturing returning to the state because of the cost structure.
“From time to time, we might get some start-up low-end manufacturing, but I don’t think this is a place people are going to move to conduct that type of business,” Malloy said. “There are just far cheaper places to do that. On the precision or high-value added manufacturing side, I think we can do better than average. We aren’t doing that right now, but I think we can.”
On the regulatory reform front, Malloy said he has a mandate out to all his commissioners to find ways to cut red tape and bureaucracy, with a goal of quickening the pace of permitting and using “fewer people and more technology to make more decisions faster.”
He said the consolidation of 30 agencies, which was passed last session, was part of a streamlining effort that he expects will continue, especially within economic development agencies, which will become more centralized.
“It’s not consolidation for the purpose of consolidation,” Malloy said. “It’s consolidation so that we can be a one-stop shop for all things related to economic development. That includes marketing and deciding on the public image of the state of Connecticut.”
Reflecting on his “First Five” program, which is offering economic incentives to the first five companies that agree to add 200 jobs or more in Connecticut over the next few years, Malloy said he is very happy with its performance so far.
To date, three companies have been selected to participate including health insurer Cigna, sports entertainment giant ESPN, and TicketNetwork. Combined, those companies have received tens of millions of dollars in tax credits and/or low interest or forgivable loans in exchange for a promise to add 200 or more jobs each over the next few years.
Malloy said they are having conversations “with a large number of companies,” for the final two slots, and he hopes to have them chosen before the special legislative session. He said his goal is to try to continue to diversify among industries and he wants to bring in a company from out-of-state.
He said the biggest shot in the arm has been the Cigna deal, which will be “monumental both in the short and long run,” Malloy said.
Cigna is receiving up to $71 million in economic assistance from the state for the promise of adding at least 200 jobs and up to 800 positions in the next few years. The company also agreed to move its headquarters from Philadelphia to Bloomfield.
“In the short run, it sends a very clear message to the insurance industry that the state is paying attention to their needs,” Malloy said. “In the long run it helps with retention of those 5,000 jobs and the fighting chance of adding up to 800 more jobs.”
Malloy said he hopes that once the program is evaluated there will be support to expand it further, an issue that will likely be brought up during the jobs session.
“We have to be aggressive to the point of changing Connecticut’s reputation for business retention and growth,” Malloy said. “I think the business community is looking for leadership from state government, which it has felt has not come in a long time. And they are looking for government to play a coordinating role to job creation, understanding we are the junior partner in that relationship.”
Governor Malloy says his latest listening tour has convinced him there’s a disconnect between the education system and the jobs market.