CT News Junkie | OP-ED | Stay In Connecticut But Don’t Dismiss Scott’s Message

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OP-ED | Stay In Connecticut But Don’t Dismiss Scott’s Message

by | Jul 3, 2015 5:30am
() Comments | Commenting has expired
Posted to: Analysis, Business, Economic Development, The Economy, Jobs, Opinion, State Budget, Taxes, State Capitol, Norwalk

What should we make of a Republican governor from a large state with a relatively strong economy who comes to embattled Connecticut to steal some jobs from us? For starters, we should pay attention and not dismiss him as a publicity seeker. We should not shoot the messenger, who in this case has a rather questionable business career of his own, but rather assess his message.

As Florida Gov. Rick Scott likes to remind us, he and Gov. Dan Malloy, a Democrat, have something in common. Both were elected in 2010 and re-elected four years later — both times by the narrowest of margins. But the similarities pretty much end right there. Scott spent his entire career in the private sector before entering politics, whereas Malloy has spent the bulk of his career in government service.

Be that as it may, Scott thought he would join the likes of other governors, such as New Jersey’s Chris Christie and Indiana’s Mike Pence, by sticking a finger in Malloy’s eye as he grappled with how to roll back a $1.8 billion tax increase that hit businesses hard.

HAROLD COBIN PHOTO “I’m here simply to get all the jobs to Florida,” Scott told business owners last week at the Norwalk Inn and Conference Center.

Several prominent state Republicans attended Scott’s talk, so there were partisan overtones to the event. I share the concern of Democrats who noted the irony of our elected officials attending a speech given by a governor whose goal it is to increase the jobless rate in Connecticut. But I accept the Republicans’ explanation that they were just trying to learn a thing or two from a governor whose state has performed better than ours economically. Of course, for the Republicans the event also had the side benefit of pushing Malloy’s buttons.

To his credit, Scott did not limit his critique of Connecticut’s business climate to the state’s tax policy. Truth be told, notwithstanding the protestations of GE, Aetna, and Travelers, the state’s taxes aren’t as high as the business community would have us believe. Most surveys place Connecticut in the bottom half of the 50 states in the area of business climate.

But Connecticut is tied with business-friendly North Carolina for second-lowest business tax burden relative to productivity, according to the Council on State Taxation. The council’s report, prepared by Ernst & Young, takes state and local tax burdens and measures them against gross state product. Put simply, Connecticut’s taxes are higher than in many states, but businesses here also produce much more than they do in a lot of those low-tax states Republicans like to crow about.

No, I’m convinced that taxes aren’t as big a problem in Connecticut’s business climate as we’re led to believe. And this is also borne out anecdotally by my own conversations with business owners in my part of the state. They’re less likely to complain about high taxes than burdensome regulations and the cost of living.

UConn economist Fred Carstensen has illustrated this problem better than anyone. He has branded Connecticut as having “the worst permitting regime in the country.” Companies avoid Connecticut because they have no idea how long it will take them to get permits. Instead, they move to states more responsive to their needs, he said.

“It’s not the state of steady habits. It’s the state of uncertainty,” Carstensen opined. And as we all know, uncertainty is the enemy of the successful business model.

In addition, Connecticut has the highest electricity rates in New England and the fourth highest in the nation. These exorbitant prices come courtesy of a boneheaded deregulation plan approved by the General Assembly in 1998. That scheme, the always fair-minded former Republican state Sen. Andrew Roraback told me in 2007, was a “bill of goods” that “has proven to be an unmitigated disaster.” Oh, and we have the second highest gasoline taxes — higher even than California.

Finally, from labor to housing, there is no getting around the fact that Connecticut is simply a high-cost state. We’ll never be able to compete with Alabama or Texas for cheap housing and low wages — or warm weather, for that matter.

But we could remove some of the barriers to enterprise that frustrate and discourage business owners. Obviously, we don’t want to unleash the forces of unfettered markets and destroy our environment or cause even more sprawl. It shouldn’t be an all-or-nothing proposition.

And there is something Scott didn’t say but should have: those who value an expansive government that helps the less fortunate and protects the environment should remember one important thing — the private sector foots the bills and the only way you can maintain a large and inclusive public sector is with a dynamic and thriving private sector employing lots of people and generating lots of revenue. Otherwise, you’re in the unsustainable position of maintaining a big government on small government revenues.

Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at ctdevilsadvocate.com and is news editor of The Berkshire Record in Great Barrington, Mass. Follow him on Twitter @terrycowgill.

DISCLAIMER: The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.

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(6) Archived Comments

posted by: shinningstars122 | July 3, 2015  12:03pm

shinningstars122

@Terry please write something that we already don’t know.

I would did in deeper into the state budget increases per year since Scott took office…they are in the billions sir.

Or the fact that over 30% of Florida’s state budget went to Medicare in 2013.

Or that in Florida the housing crash was one of the worst in the nation post great recession

Yeah there is a reason Scott want to steal as many jobs as possible as his state spending is growing faster than in CT.

In 2013 the median housing price in Miami Dade county was $225,000…hey that is almost like CT which was $259,000 for that very same year.


There is nothing innovative to Scott’s efforts it is simply making promises and tax deals to support the expansion of state, county, and municipal government and services;along with tax increases, which the state will desperately need to do to stay in the black.

It is not sustainable that mentality…they should take note from CT for that one.

posted by: Terry Cowgill | July 3, 2015  2:11pm

Terry Cowgill

@shinningstars122 > I never said Scott was doing a great job or that Florida is some sort of paradise. My point is that the message should not be dismissed because of the messenger.

posted by: Biff Winnetka | July 3, 2015  3:26pm

Blah, Blah, Blah…

Pump out all the “positive” CT stats you want.  It is all just a game everyone plays to remain in denial of the issue.

I trust PEOPLE and the decisions they make pursuing their self interests.  And the decisions people and businesses are making in pursuit of their best self interests are reflected in the FL vs CT net migration figures.

CT is BLEEDING people and FL is gaining people in droves.  Florida will probably gain a Congressional seat in 2020 that comes at Connecticut’s expense.

Everyone on both sides of the “What’s Wrong With CT” issue needs to accept that migration out of the state is THE biggest problem.  You can’t have a budget that grows annually at a rate greater than inflation while the tax base shrinks.

12-Step program step #1…

We admit to ourselves that something is seriously wrong in our state. We admit this and quit trying to play games with ourselves anymore. We accept that our state finances have become unmanageable in many ways.  The spending addiction has become out of control.

The first step is to admit the truth of where we are, that we have become powerless over this spending addiction and that we need help.

Illinois has just taken Step #1.

CT is still in denial.

posted by: Biff Winnetka | July 3, 2015  3:37pm

How is it that Florida has firmly established itself as a true hub for the life sciences and biotechnology research and development business???

Why did Scripps and Max Plank move to Florida without EVER considering CT.

Why did Mayo Clinic open in Florida???

Why did Cleveland Clinics open in Florida???

Why did Moffitt move to FL instead of CT???

Why is Pratt and Sikorsky making stealth job moves from CT to FL???

I could write examples for pages.

Stop bashing successful states like Florida.  That’s what jealous children do.  Man up and OWN our states non-competitiveness so we can fix it!!!

posted by: shinningstars122 | July 7, 2015  6:14am

shinningstars122

@Biff why not take the time to post the tax deals offered to those companies to make them commit to Florida?

There are 48 other states that compete for these jobs too.

My points were not bashing the state but presenting the facts that their government is growing greatly and that they need to expand their tax base to support it.

You can call it “success” but you can’t justify or sustain the expansion of state/ municipal government by relaying on an expanding populations of new residents to pay taxes.

It is like playing the lottery or counting your chicken before they hatch.

This is not in the best interests of any resident of any state in our country.

posted by: dano860 | July 13, 2015  8:28pm

Rarely will I agree with Fred Carstensen but he is right on target about the permitting process in Ct. If the state gets involved a project can and will be stalemated for months at a minimum. They are their own worst enemies.
Louis Chenervre, former P&W president and CEO of UTC told Dannel that the electric rates were killing large companies but nothing never came out of that.
Weather and infrastructure would be the next large detriments to locating in the northeast and Ct.