🔒Newcomer Hotaling touts pro-business platform in Independent run for governor

Rob Hotaling is a newcomer to Connecticut politics but he’s trying to make a big splash in his first run for public office.

He’s the Independent candidate for governor, taking on incumbent Democratic challenger Gov. Ned Lamont and Republican Bob Stefanowski.

He was a relative unknown name before the Independent Party endorsed him as their nominee in an August vote. And he’s a long shot to win office, with many recent polls not even listing him as a candidate.

Still, he shares some common traits with Lamont and Stefanowksi — most notably they’ve all spent their careers in the private sector. Hotaling has also flirted with the Republican and Democratic parties, having formerly been members of both.

He describes himself as fiscally conservative and socially progressive.

“I believe personally, that the government should not be in your pocket or in your bedroom,” he said.

Hotaling, a UConn electrical engineering graduate with a background in technology and finance, is currently a senior vice president and head of digital delivery at Stamford-based Webster Bank and he has some entrepreneurial experience.

He founded a startup called Verbi, a mobile-first automated gunshot and explosion detection system. The company couldn’t find enough investors to gain traction, he said.

Hotaling is running on a pro-business platform and his campaign recently unveiled a broad economic plan that prioritizes reducing the cost of living and doing business, addressing the labor shortage, and investments in aging infrastructure.

He said burdensome regulations and high taxes are the driving forces behind Connecticut’s unfriendly business climate and lack of higher-paying jobs.

Some of his policy remedies include:

• Eliminating business property and motor vehicle taxes and offsetting any local revenue losses with expanded Education Cost Sharing funding.
• Fully funding the PILOT (payment in lieu of taxes) program in accordance with state promises to municipalities, to drive down property tax rates.
• Lowering the income tax rate (6.99%).
• Broadening the sales tax base (e.g. ensure compliance with the multistate compact to collect internet sales tax) while lowering the sales tax rate (6.35%) for individuals.
• Investing — in the form of grants, tax credits and rebates — in modern small business manufacturing and technology businesses to create 100,000 new jobs and new tax revenue over 10 years.
• Investing in infrastructure for integrated ports, rail and highways.

The 44-year-old Hotaling, who lives in Cheshire with his wife Luz and their four young children, recently sat down with the Hartford Business Journal to discuss why he’s running for office and what his plans would be if he became governor.

Here’s what he had to say:

How would you assess the state’s economy and business climate right now?

A. It’s poor. If you look at CNBC, we went from 24th to 39th in business friendliness. We have two Fs, two Ds and three Cs. The two Fs are cost of living and the economy, the two Ds are cost of doing business and infrastructure, the three Cs, surprisingly, include technology and innovation and access to capital.

Being realistic, if we can turn these Fs to Cs over the next four years, and turn the Ds to Bs, that would contribute significantly in terms of economic growth. I’d like to eliminate business personal property taxes and motor vehicle property taxes.

We know with economic modeling that if you do tax cuts or tax rebates, they typically spur economic growth because you’re putting money back into consumers’ pockets. You expect that consumer to go back in the economy and buy things.

In my opinion, businesses in the state, especially manufacturers, are not incentivized to buy new equipment, because their tax rate is so high. That restricts growth.

How would you pay for eliminating business property and motor vehicle taxes, which raise hundreds of millions of dollars annually?

A. We would not be looking at touching K-12 education, or public welfare program funding.

What we’re looking at is gaining efficiencies and savings by streamlining with technology, and using that money to reinvest rather than wholesale cutting programs. But we also want to look at underperforming programs.

We would also fully fund the PILOT program and expand Education Cost Sharing funding to municipalities to make up the revenue lost from the property taxes.

On your campaign website you say you want to simplify regulations. What does that entail?

A. I believe the more you deregulate, the more businesses can reach their full potential, which can spur economic growth.

A cornerstone of my campaign is to significantly expand the manufacturing sector, but in order to do that we have to reduce some of the regulations and compliance steps that manufacturers have to go through.

You’re proposing to pay off the remaining unemployment insurance fund debt that employers must repay. Why?

A. We have a multibillion-dollar surplus and I believe some of that money should pay off the remaining debt. Small businesses were hit hard by the pandemic, and it’s not fair that they had to go into a government-forced lockdown.

We should use the surplus to give them some relief.

Lamont and the legislature agreed to dedicate most of last fiscal year’s surplus, $4.1 billion, to pay down the state’s massive, long-term pension debt. Was that a smart policy?

A. Yeah, I agreed in terms of paying down those liabilities, the pensions. They need to be funded.

In terms of fiscal stability, how would your administration ensure that we continue to have surpluses and balanced budgets? Is there anything you would change in terms of the way Connecticut operates?

A. Yes, fundamentally less regulation. I would also look at dropping the corporate tax rate. One of the cornerstones of my administration is to recruit manufacturing technology businesses back to Connecticut.

The best way to do that is really addressing cost of doing business, regulation, taxation, things of that nature. We are very focused on bringing manufacturing jobs and high-tech jobs back to Connecticut, which would grow the economy and help raise new tax revenue.

What are your thoughts on how the state uses business incentives to attract and keep companies here? Do you think we should change our policies in that area?

A. This is very tricky because you’re really competing against other states, and it depends on how far you’re willing to go because sometimes you can give a really great deal but then in the end it’s a net negative.

I would continue to look at tax rebates and tax cuts, particularly incentives for certain industry clusters that want to be located near each other.

We also need to recruit more small businesses to urban areas, so I would work with landlords to try and repurpose vacant or blighted properties.

One area that small businesses need help with is grant writing. We have a lot of grants available on the state and federal levels, but many companies don’t know about them or how to access them. I’d establish a small business grant writing assistance program.

What’s your assessment of the labor shortage and what’s driving it? How would your administration tackle it?

A. Cost of living, including property taxes and healthcare costs, is driving it.

Besides that, I would like to see more apprenticeships, mentorships, and internships. Maybe we provide schools subsidies that contribute workers for small businesses. We have to leverage our community colleges more. We have to strengthen our school-to-business pipeline.

I think we really ought to invest more in trade schools because not everyone’s in a position to be a technology worker. Some people are positioned to be an HVAC worker.

In terms of the Lamont administration, which policies do you think have been most detrimental to the economy and what are some policies you’ve agreed with?

A. I think that generally, the surplus we’ve received from the federal government’s stimulus funding has propped up our economy in a way that doesn’t accurately reflect the fiscal health of our state.

If those federal dollars lessened, where would Connecticut be?

Gov. Lamont has cut taxes, but I would have done more. I also think we haven’t done enough in terms of shrinking the worst achievement gap in the nation.

There is a lot of empty office space in downtown Hartford and in other Greater Hartford towns. What should a city like Hartford do with all this empty office space and does the state have a role to play in helping bring the city back to life post-pandemic?

A. There are two types of empty office space. There’s blight generally. And then there is the post-COVID remote work trend that has caused office vacancies to increase.

Let’s talk about blight first. I remember going to Detroit and looking at these empty buildings that were renovated and they became urban farms. And they put these farmers markets around them. It really did a lot for those communities. It cleaned them up, it made it look nicer, safer. You’re also generating food. So that’s one area to look at.

From an office space perspective, we have to encourage and incentivize workers to get back to the office. I think that is probably the easiest approach to repurpose buildings and focus on what types of businesses need more physical space.

We also should consider investing in more incubator space to help grow technology businesses.

Towns are also struggling with affordable housing, so conversion of business space into residential space is another possible solution.

The Capital Region Development Authority has played a major role in Hartford, converting old office buildings into residential development. Would you continue to support its mission?

A. I would definitely continue that and look at actually expanding it in the right places.

How would you ensure a bipartisan working relationship to prevent legislative gridlock?

A. I think I’m best positioned to bridge that divide, having been part of both parties, and being more or less where Connecticut is, from an economic, financial, and social perspective.