Dan Malloy says indecision, lack of communication, delays and buck passing among Connecticut’s state agencies and bureaucrats must stop if the state is ever to shed its image as a place that’s hostile to business.
Regulatory reform, lowering energy costs, boosting the state’s transportation infrastructure, and improving education in Connecticut are among the cornerstones of the Democratic gubernatorial candidate’s policies to spur the growth of businesses and jobs in the state.
Malloy, in an hour-long interview with the Hartford Business Journal, outlined his political philosophy to help right Connecticut’s economy.
He favors a more aggressive approach to pooling health care risks and cutting the cost of energy in Connecticut. He also favors a comprehensive examination of the tax structure and an independent authority to speed economic development around Bradley International Airport, but he draws the line at a publicly funded new arena in downtown Hartford.
The former mayor of Stamford is in a heated race with former businessman and ambassador to Ireland Tom Foley. The latest Quinnipiac Poll gave Malloy a 3 percentage point lead, which was within the margin of error.
During his interview, Malloy had a firm grasp of the issues facing Connecticut businesses and he was quick to respond with his views on how to fix them.
His philosophy on improving the state’s business climate goes beyond a simple economic development strategy. He said many issues including energy, education, transportation, and bureaucratic red tape are part of the equation.
Malloy said he views state government as a “junior partner,” to the private sector. Job creation is something that needs to be spurred by small businesses, he said.
“The role of state government is to keep up the infrastructure, like roads or schools, or intellectual infrastructure, like making sure we have a medical system capable of sustaining research, grants and new invention,” Malloy said. “Job creation is a private sector enterprise. We have to understand that we aren’t the leader there. But we are obligated to make appropriate investments when it’s necessary.”
Of course creating a better business climate in the state will have as much to do about balancing the budget as anything else. Uncertainty surrounding a projected $3 billion budget deficit, and the possibility of new or increased taxes, has paralyzed business hiring and expansion.
Malloy said he understands that state government needs to cut costs and he has plans to consolidate state agencies by a third, largely by eliminating management positions.
The larger question for the state’s business community is will there be any new taxes?
Here’s what Malloy had to say:
Q: Will you raise any business taxes to help balance the budget?
A: I don’t begin the proposition by thinking we should raise taxes. I have not ruled anything off the table, except that I will not balance the budget on the backs of people who are most dependant on state government. I am very concerned about some taxes. For instance the idea that every small business pays $250 to register with the state, which is exactly the same amount that our biggest companies pay, is always something I’ve found as a troublesome concept.
Q: As part of your policy agenda you said you would initiate a multiyear comprehensive tax reform initiative. What will that entail?
A: We need to take a long-term, systemic view and look at best practices in terms of our tax structure. We need to understand as a state where we are and determine what tax advantages or disadvantages we have. Do we have regulations or taxes that we are applying to big and small businesses in Connecticut that make us less productive, or make it less likely that jobs will stay, come, or grow in our state? We don’t know that right now. So we need to benchmark all of our regulations and revenue sources, specifically taxes that are taken into consideration by people who are making decisions about where to locate their company.
Q: You said you want to consolidate state agencies by a third? Which agencies will you target?
A: Any agencies staffed at 10 or fewer people are agencies that may make sense [for consolidation]. I want to wrestle levels of management out. I think the process is over-managed. In the state of Connecticut we are kicking every decision up as opposed to making decisions on the service level.
Q: You said Connecticut’s regulatory environment is one of the chief reasons the state has an anti-business perception. Can you explain that, and how to fix it?
A: I think we’ve tended to be either overregulated, or unable to make a decision within that regulatory framework within a reasonable period of time. Getting a decision out of state government in a timely fashion has almost been impossible. I think it’s a cultural problem in agencies and departments. Companies need to know what you can or cannot do and they need to have confidence that you are going to make a timely decision. We are going to bring about systemic and structural change. For example, maybe we need a law that says if an application is certified as being completed, we give ourselves a certain amount of time to grant the permit. If we don’t respond in that amount of time then the permit is automatically granted.
Q: How do we better coordinate economic development on a state government level?
A: I want to restructure Connecticut’s government so that everyone who’s involved in areas that potentially have an impact on job creation are meeting, talking, and coordinating their activity. I think we need a more comprehensive approach, including regular discussions between economic development agencies, labor, environmental protection, transportation and even the banking and insurance departments.
Q: Do we have that coordination right now?
A: No. Absolutely not. It doesn’t exist in the state of Connecticut. I think economic development over the last 20 years has been done on an ad hoc basis. They have given lip service to the concept of clustering with very little to show for it, except some growth in bioscience that would have taken place anyway.
Q: So is improving the clustering concept going to be part of your economic development strategy?
A: Understanding that like businesses want to be located near each other is important. On the other hand, pursuing a cluster concept and failing to see the trees through the forest would be a mistake. We should be on the lookout for any company that wants to come to the state and not just businesses from particular industries.
Q: So what do you view as Connecticut’s growth industries?
A: Life sciences, which means biotech, biomed and stem cell research and production. Health care, precision manufacturing, nanotechnology, and alternative energy are also growth industries. Obviously we have strength in financial services, insurance, and real estate, but I would prefer to think about those in a somewhat more segmented way. I think we have a property and casualty cluster on a standalone basis. We have a health insurance cluster on a standalone basis. We have a financial services and investment cluster on a standalone basis. Thinking about them as a single entity I think sometimes causes us to miss opportunities to grow jobs and attract companies.
Q: You’ve identified high energy costs as one of the primary reasons Connecticut is losing its precision manufacturing base. What would you do to reverse that trend?
A: I think time and time again we’ve missed opportunities to take steps that would lower electric costs, whether it’s putting more pressure on the modernization of the existing delivery system to address congestion problems, or making appropriate investments, with agreements, on the purchase of electricity at the low market prices. We also need to pressure ISO New England to adopt rules that are more beneficial to Connecticut. All of those things have been opportunities missed by the current administration. Also I want to see different conservation efforts in the state as a way to combat energy costs.
Q: Where do you stand on the controversial energy bill democratic lawmakers tried to push through last legislative session?
A: I think it was far from perfect. Although I said I would have signed it, I’ve also said I think how it was designed is indicative of the current administration’s approach. My administration will be much more activist in trying to lead the discussion on how to lower electric rates, which I think is a paramount economic issue for Connecticut. We’ll be putting forward our ideas specifically for lowering the costs of energy.
Q: How would an independent Bradley Airport Authority help spur economic development at the airport?
A: Bradley’s current structure has prevented fast and rapid movement. It took them eight months to fill a marketing position for an airport that has seen a 23 percent decline in passenger traffic. The quasi-public authority will provide much faster decision making. It will allow the authority to get the job done without the bureaucracy of the state Department of Transportation and without resorting to the legislature or executive branch.
Q: How far are you willing to go in terms of pooling, and opening up the state insurance plan to the general public?
A: Pretty far. With respect to pooling, we should begin with local governments and boards of education and nonprofits under contract with the state. Then we digest that and move in a direction to make sure we are lowering the cost of health care for as many people in the state of Connecticut as we can.
Q: Should the state insurance plan be opened up to small businesses?
A: That’s the desired result, but we need to make sure it doesn’t raise the costs to state workers.
Q: Would you be willing to open up the state insurance pool to everyone in Connecticut, like a single-payer system?
A: In one fell swoop, no, I don’t think we can do that. Obviously the federal government decided not to move in that direction and I don’t think we are in a position to move in that direction. That’s why I’m trying to take a studied approach to this and first open up the pool to boards of education and nonprofits. All their demographics are similar to state employees, so there are reasons to believe that by including those groups in the pool will actually help the pricing mechanism.
Q: Do you support paid sick leave?
A: I support a version of it and I’m willing to work with people who have complaints about it. I think the concept that some number of hours of delivered service justifies some number of hours of sick time is fair.
Q: Should the state invest in alternative energy?
A: I don’t think all alternative energy is equal. I think there are going to be winners and losers. For instance photovoltaic in Connecticut for home usage is something we should invest in. But I don’t know what our prospects are for a photovoltaic farm. I think wind generation makes sense in some portions of our state, but not at all in others. I think we should be investing in the further development of fuel cell technologies.
Q: Would you support legislation that allows municipalities to raise revenues other than property taxes?
A: Yes. The easy no brainer is hotel and motel taxes. There is a direct cost to the community that is housing a motel, hotel and bed and breakfast, and yet they don’t share in the revenue. We know that most of those stays are by out-of-staters. Why wouldn’t we want a portion of those fees?
Q: Hospitals and nursing homes have been underfunded for a longtime with Medicaid reimbursements. Would you find more money for them?
A: What you have to understand is that for every Medicaid dollar, at least 50 percent is federal dollars. I think it’s time that we start looking at accessing additional federal dollars, and funding these institutions so that they can survive. I believe the state hasn’t been aggressive enough in getting those dollars, and it’s been ideologically driven.
Q: Would you support investing state dollars for a new arena in Hartford, with the hopes of attracting a new NHL franchise?
A: Without an affiliated professional team participating in underwriting the cost of a new facility, I don’t know how that would ever be done. I’ll cross whatever bridge I have to cross, and make decisions that are economically driven, based on the participation of end users and the reasonable economic projections. But investing in a new arena with the hopes that somebody will come, absolutely not.
Democratic gubernatorial candidate Dan Malloy takes a call amid the clutter of campaign activity at his Hartford headquarters.
Dan Malloy
Age: 55
Position sought: Governor
Party: Democratic
Previous work experience: Former mayor of Stamford; former assistant district attorney in Brooklyn, NY
Education: Law degree from Boston College Law School
