This week, election season finally comes to a close, and one gubernatorial candidate will transition from campaigning to governing.
There will be a short lull between Nov. 4 and inauguration day in January, but the next governor shouldn’t wait to begin tackling the many issues Connecticut faces.
Here are five issues Gov. Dannel P. Malloy or Tom Foley must focus on to improve the state’s economic competiveness.
Budget: Fewer issues create more business uncertainty than a state budget deficit. Connecticut is facing a projected $1.4 billion shortfall in fiscal 2016 even after a record breaking $1.5 billion tax increase in 2011. Malloy and Foley have both pledged not to raise taxes, but actions speak louder than words. The sooner the next governor works with the legislature to develop a blueprint for erasing the red ink the better. And it can’t be just a short-term fix.
Connecticut needs to fundamentally change its financing structure so the ebbs and flows of the economy don’t dictate the majority of its tax revenues. And enough money needs to be set aside to invest in transportation, education, and our underfunded pensions.
Taxes: It would be easy to ask the next governor to implement across-the-board business and individual tax cuts to make Connecticut more economically competitive with other states. That, however, wouldn’t be fiscally prudent. We understand the state’s precarious financial position, which gives lawmakers little fiscal flexibility. In the near term, meaning the next one-to-three years, legislators should focus on rolling back taxes to 2011 levels.
Long term, we’re eager to hear recommendations from the state’s recently appointed tax panel. As HBJ reporter Matt Pilon writes in this week’s issue, the 15-member board of lawyers, executives, accountants, and former lawmakers is taking a comprehensive look at the state’s tax code to recommend ways to make it fairer to businesses and individuals. We hope their report doesn’t serve as a paper weight to the next governor and offers a real plan to make Connecticut a less costly place to do business.
Regulatory reform: Regulatory reform is a political buzzword. Every politician says they want to improve the regulatory environment, and some small- and even medium-sized steps have been taken in recent years to move the dial slightly in the right direction. But ask just about any employer in a range of industries, from construction to real estate to banking, and you’ll get an earful on why the state is a tough place to do business. The next governor must continue weaning efficiencies out of state agencies that issue permits, and tackle some of the major impediments that add unnecessary time and costs to employers willing to invest in their business and in the state.
Workforce development/education: Connecticut’s graying workforce is a major cause for concern, yet the state seems to lack a coherent strategy on how to refill jobs left open by the upcoming wave of retiring Baby Boomers. For a state that has trouble retaining young college graduates, the impact will be significant. Take a look, for example, at the manufacturing industry, which is facing a major workforce shortage. The state has been implementing an array of new training programs to deal with that issue, but what about other major industries, like banking, finance, and insurance? It’s best to devise plans now to strengthen Connecticut’s worker pipeline, than institute a scatter-brained policy as employers leave to find a more fertile talent pool.
Transportation: First step here is to ban legislators from raiding the special transportation fund. Then the state needs to better prioritize its spending. It must quicken the pace of road and bridge repairs and identify the long-term projects, many of which lack funding sources, that are most closely-tied to the future economy, and then develop a plan to finance them.
