As the state Legislature heads into the final weeks of its session, this should be the time when bad ideas are getting flushed out of the system. That’s how the process is designed to work. Anything and everything can and should be put on the table and given a look. Through consensus, we get to the best possible results. And by now, after weeks of debate, good ideas are floating to the top.
Nice theory. But in practice we’re seeing something quite different.
In the business world, we make a clear distinction between strategy, the shaping of goals and directions, and tactics, the mechanics of getting there.
In the world of Connecticut government, it appears the tacticians have run the strategists right off the capitol campus. That’s a shame. Just as the trees are blossoming into their full rich spring colors, signaling the seasonal renewal and a fresh start, Connecticut appears headed toward another round of shortsighted, instant gratification legislation that assures a long cold economic winter.
It’s clear the budget deficit is the driving force here. And it’s understandable that legislators would look in the cushions of the couch for spare change. But the idea of increasing the hotel occupancy tax from 12 to 15 percent is a bad idea.
The short-term calculation is simple. The harsh economic downturn reduced business and leisure travel. The state’s take from the hotel occupancy tax fell $18 million short of expectations. If you think travel has hit the absolute floor and can’t go lower, then socking the core of visitors for 3 percent more will close the state revenue gap a bit.
But that’s the kind of argument that even a junior retail clerk associate wouldn’t buy. If you increase the tax, only the state revenue can win. And even that’s not certain. Increasing the tax makes the tourism industry 3 percent less competitive and may hurt occupancy further. In contrast, if we help the industry recover its footing and grow occupancy, then the hotels, their employees and the state all get a little healthier. That’s a win-win, which should be what we’re seeking.
Then there’s the matter of trying to legislate the state out of the global economy.
Jobs leaving? Let’s pass a bill that says they have to stay.
It doesn’t work that way. You’d think a state that has a couple of centuries of experience with the changing nature of business and the economy would have learned this lesson. Apparently not.
If we adopt the contracting bill making its way through the Legislature, the state will be paying the bill for years to come. The message is a killer for economic development, telling global players we simply don’t get it today and don’t want to get it tomorrow. The reality is a killer for state efficiency, tying the state to a smaller than normal field of vendors who can raise prices with limited consequence. It’s a killer for the labor market, where artificially inflated wages drive up the cost of doing business for everyone.
If the value a worker adds to the product justifies paying $20 an hour, legislative action forcing it to be done here at $40 an hour is simply folly. The company that tries it will be undercut by out-of-state and/or out-of-country competitors. See the U.S. auto industry. See the shelves at Wal-Mart. Check out the history of Connecticut’s textile industry.
It’s time for strategists to mount a counterattack in the Legislature. If we let the myopic tacticians carry the day on bills like these two, we’ll all be worse off when the session closes May 5 and far into the future.
