The business community is giving Gov. Dan Malloy high praise for his two inaugural addresses, saying the state’s new chief executive struck the right tone stressing the importance of improving the state’s economy.
But the honeymoon may not last long.
While Malloy provided no new details in his addresses to the public and state lawmakers last week on how he intends to right the state’s sagging economy, those issues will be fleshed out in February when he delivers his budget plan.
And it remains to be seen how his vision of “shared sacrifice” in closing the state’s $3.5 billion budget deficit might impact commerce.
“Small business owners are open to concept of shared sacrifice but no one knows that means right now,” said Andrew Markowski, Connecticut director of the National Federation of Independent Business. “The one thing everyone is looking for is for some kind of certainty.”
Markowski said small businesses have already sacrificed over the past couple of years with the prolonged downturn, higher health insurance and energy costs and uncertainty coming out of Washington D.C. and Hartford.
And tax increases, Markowski said, shouldn’t be considered until budget cuts have been exhausted.
“There has been no appetite to make cuts over the last several years,” Markowski said.
Still, the business community remains optimistic, saying the Malloy Administration has shown great leadership early on, and needs to succeed if Connecticut is going to once again become an attractive place to do business.
“For a Democratic governor to recognize that Connecticut hasn’t had a business-friendly environment sends a clear message to the business community that he wants to do things in a different way,” said Joseph Brennan, the chief lobbyist for the Connecticut Business & Industry Association. “The legislature has been debating things in recent years that would make it more difficult for businesses to compete here. That has to change.”
In his speeches, Malloy said the state is suffering from an economic and employment crisis, “fueled by an unfriendly employer environment, a lack of educational resources, a deteriorating transportation system, and an enormous budget crisis of historic proportions. All coddled by a habit of political sugarcoating that has passed our problems onto the next generation.”
And he pledged to fix that through “a shared” sacrifice and an “emerging movement for rational, honest, achievable change.”
While Malloy’s speeches were light on specifics, he did say he wanted to put in place an economic development strategy that makes sense for the 21st century economy, aggressively competing with other states and nations for lucrative biotech, nanotech, fuel cell technology and stem cell research jobs. He said he also wants to attract energy companies that can reduce the state’s dependency on fossil fuels, while aggressively developing Connecticut’s three deepwater ports to spark commercial activity and decrease our reliance on heavy trucking and the congestion the trucks bring to highways. Making Bradley International Airport an independent entity is also a top priority.
Malloy expressed a desire to help economic development in cities and towns, saying the state will “marshal all the resources of the state government to help local projects with an economic impact.”
Malloy said he also wants to remove barriers that keep the state from attracting employers by lowering the highest energy costs in the continental U.S., lowering health care costs, and reforming Connecticut’s regulatory system to protect the public, while building the economy.
Brennan said he was pleased with Malloy’s focus on the economy, saying the new governor has laid out a “great vision for the upcoming session.” Focusing on the business environment as well as transportation and education issues are key concerns among businesses.
But if Democratic lawmakers are going to follow-through on implementing that vision, they must stay away from business unfriendly policies that have been pursued in recent years, Brennan said.
That includes attempts to be one of the first states in the country to pass mandatory paid sick leave, adding insurance mandates to employer’s health plans, and a host of tax proposals ranging from combined reporting for corporations to eliminating certain tax credits and sales tax exemptions, especially for manufacturers.
“There’s been a constant drum beat from the legislature that business doesn’t pay its fair share,” Brennan said.
How long the honeymoon and good feelings last, Brennan said, will depend on what Malloy’s budget plan looks like.
Brennan said Malloy must cut the size of government as much as possible before any new taxes or tax hikes are brought to the table.
“If he does the budget in a way that seriously looks at how state government functions, and comes up with how to become leaner and efficient, I think the honeymoon can continue,” Brennan said.
Malloy has already promised to reduce spending and raise taxes to handle the deficit. In his speeches last week, for example, Malloy pledged to cut the size of his executive office and the number of state agencies.
But he said he will not just cut “for cutting sake,” but to re-conceive “government so that better decisions are made and implemented faster.”
