Is Connecticut Open for Business? Malloy Responds at Forum

During an economic development panel discussion Tuesday night, Gov. Dannel P. Malloy said the state government had to treat businesses as partners and give them the confidence that their problems and concerns will be heard. Part of that engagement, he said, is in proposing a realistic budget:  "Telling the truth and offering real solutions to the problems created over time is the only answer.”

Malloy discussed the state's business climate before an audience of several hundred people at the Lincoln Theater at the on March 1, as part of a Hartford Courant Key Issues Forum. The panel, entitled “Is Connecticut Open for Business?,” was moderated by Hartford Courant columnist Tom Condon. Malloy was joined by Greg Hayes, chief financial officer for United Technologies, and Susan Coleman, a finance professor at the University of Hartford.

The panelists fielded questions which had been emailed to the Courant, as well as questions submitted by audience members. Much of the discussion focused on Connecticut’s budget woes, a subject foremost on the mind of most audience members.

One of Malloy’s primary messages was that the state can’t just raise taxes or cut spending. Our deficit is too big to do one without the other, he said, adding that everyone has to make sacrifices. His response to a question about targeted spending cuts was, “I have a $3.3 billion deficit; is anyone listening out there?”

The economic situation figured prominently in the gubernatorial election and was no surprise to Malloy. However, his best one-liner of the night had to be: “You get elected governor, you get sworn in, and then you have to produce a budget in six weeks, and all hell is breaking loose.”

Another significant theme of the panel discussion was that future decisions will be guided by what is good for business in the state. Condon directed a question to Hayes about previous comments he had made on the high cost of doing business in Connecticut. Hayes said, “It is a good place to do business, but it has to be the right business. Connecticut is not the best place for things that have to be mass produced at low cost.”

Hayes said that the best things about Connecticut are the quality of life and the state’s educational system. But he admitted that Connecticut is not a main attraction for kids coming out of college. “We need to attract them to our communities. We’ve started that process but we still have a long way to go.”

Although Coleman said that large businesses cannot be ignored because they employ so many people, she spoke for the small businesses when she said, “raising taxes, lowering taxes, nothing alone is going to do it. We need to work toward making Connecticut more competitive for small businesses.” She said that for business to succeed, you need “human capital, social capital, and financial capital. One of the great things about Connecticut is that we have all three.”

One area where the panelists disagreed was concerning the expansion of paid sick leave benefits. Coleman said, “Anything that raises costs and reduces flexibility is not good.” Malloy said, “I think it’s a health issue. The idea that someone will lose their job if they don’t go to work sick is unacceptable.”

Some specific ideas for business development included enhancing Connecticut’s role in alternative energy solutions, such as hydroelectric power. Malloy said that the work being done with stem cell research is groundbreaking. He would like to see call center work return to Hartford, and also thinks we’ve ignored potential opportunities for traditional insurance companies. “We need real jobs; we need to tell our story,” said Malloy. All agreed that transportation issues are a critical component of both the problem and any potential solutions.

Hayes thinks that the state should be run more like a business. The principle followed at UTC is, “What gets measured gets results.” He said, “Maybe that’s what’s missing in the state – accountability. At UTC it’s all about productivity. The state can’t spend more than it’s taking in.”

Coleman sees the current fiscal crisis as “an opportunity for us to articulate our priorities.”

Malloy pledged to approach the budget on a global basis, and said he won’t cut state spending only to create a burden for the 169 individual towns. He also said that the spending needs to constantly be revisited. “We need to examine tax expenditures on an ongoing basis. There’s no culture in Connecticut of results-based accounting, and that needs to change,” Malloy said.