Connecticut often gets a bad rap for its burdensome regulatory climate, but there are some instances where policymakers get it right.
One example was a 2012 change to state liquor laws that allows Connecticut breweries to open onsite tap rooms. Previously, brewers were considered manufacturers and could only give tastings, or they had to get a liquor license as a brewpub and sell beer along with food.
Now breweries can sell up to half-gallon growlers directly to consumers (without serving food), allowing them to earn higher margins because they don’t have to pay for distribution, transportation, or even bottling to get their libations in the hands of thirsty customers.
As HBJ Managing Editor Brad Kane reports this week the regulatory change has helped spur a surge in new craft breweries in the state, by making it financially easier for them to get off the ground as startups.
In fact, there are nearly as many craft breweries in the development pipeline today as there were in operation three years ago.
The regulatory change was a simple, small, but smart move by lawmakers and represents a true example of the legislature improving the business climate. Now, the challenge is to replicate that success on a much grander scale, so key industries, particularly manufacturing, find it easier to operate in the state without continually being tripped up by red tape.
Much of the state’s efforts to help businesses in recent years have focused on offering companies grants and loans to add or preserve jobs. Those are only short-term solutions that won’t help the state with long-term job growth, something that has eluded Connecticut for decades.
Refocusing efforts on more widespread regulatory reforms will not only cost taxpayers less, but also provide benefits that reach more companies. It can also help the state shed its business-unfriendly stigma.
No more tribal gaming
Connecticut’s gaming industry showed more signs of struggle last week, as the Mohegan Tribal Gaming Authority reported a 38 percent drop in third-quarter profits.
The authority, which operates Mohegan Sun casinos in Connecticut and Pennsylvania, blamed a lack of economic confidence and a decline in bettors’ discretionary dollars for the poor performance, which is likely just a harbinger of more bad news to come.
Connecticut casinos have largely failed to recover from the economic downturn and with new competition on the horizon in nearby Massachusetts and New York, the economic outlook for Mohegan Sun and Foxwoods is bleak.
That is why it’s imperative that Connecticut officials continue to block efforts by the federal government to potentially recognize three additional tribes in the state, which could lead to even more casinos. The addition of any new gambling halls in Connecticut would oversaturate an already oversaturated market.
Last week, the state received a bit of good news when the Bureau of Indian Affairs decided to extend a comment period deadline for 60 days on a proposal that could potentially recognize three more tribes in the state: the Eastern Pequot, the Golden Hill Paugussett of Colchester and Trumbull, and the Schaghticoke Tribal Nation of Kent.
This political and legal fight has gone on for years, and there is a lot at stake for Connecticut. Besides introducing the potential for new casinos, newly recognized tribes would take land away from state and local governments, further eroding Connecticut’s tax base.
Gov. Dannel P. Malloy and Attorney General George Jepsen are leading the fight in opposition to further tribal recognition, but there is no guarantee they will succeed. They now have until Sept. 30 to flesh out their legal case.
Let’s hope they put forth a winning argument, because Connecticut can’t afford more casinos or a further shrinkage of its tax base.
