Frantz letter: Killing Connecticut
General Electric’s departure from Connecticut is devastating, both in economic development terms and symbolic loss.
When the move one day becomes a case study at any given business or public policy school, it will be a lesson in exactly how not to run a state.
GE’s leadership made it very clear over several years that they were very worried. They cited:
The state’s ever-worsening budget deficits;
Massive unfunded liabilities;
Record tax increases and retroactive tax hikes;
The poor overall business climate;
The lack of respect coming from Hartford.
The concerns of the ninth most valuable brand in the world were completely justified. We learned just six months ago that Democratic state lawmakers intended to pass the second largest tax increase in Connecticut history. We also learned there would be changes to the tax code. Those tax changes would prove to be non-starters for certain corporations.
Two months ago — not even halfway through the fiscal year — we learned that we were expecting a $360 million state budget deficit. Combine the deficit with the third worst funded pension system in the nation, a lack of resolve to make structural budget changes, and a perpetually chilly attitude in Hartford toward businesses, and it becomes obvious why GE decided to pull the plug on Connecticut.
What are the lessons here?
1) Run a healthy fiscal house with predictability.
2) Keep tax rates competitive.
3) Fund your pensions.
4) Listen to and respect your business partners.
Having been involved in economic development for more than 20 years in this state and after hearing nearly every complaint that exists about high taxes, onerous regulations and hostile attitudes, I have always believed the state has to play world class defense, especially with its Fortune 500 companies, before attempting to play offense. Well, we just got run over, and Massachusetts scored. Which brings us to lesson No. 5: It is much more cost effective to retain jobs than it is to spend very large amounts of taxpayer money to bring new jobs to the state.
The Democratic majorities at the Capitol will continue to say GE’s move had nothing to do with taxes or business costs. I will leave it to the reader to judge whether the decision-makers in Hartford even remotely care about how the business world works. Is it really just a coincidence that we have plunged to the bottom of the barrel in nearly all business-related rankings in only a generation?
This corporate calamity could have and should have been prevented. We can — and must — do much better than this going forward in order to prevent killing our beloved state.
State Sen. L. Scott Frantz represents the 36th Senate District, which includes Greenwich, New Canaan and Stamford.