Job Growth Round Table Suggests Aiding Small Businesses
by Nicholas Rondinone | Aug 8, 2011 9:45am
(7) Comments | Commenting has expired
Posted to: Business, Town News, Labor, State Capitol
To encourage job growth, Democratic and business leaders suggested the state support start-up, small and medium sized businesses while selling Connecticut to prospective businesses outside the state at a Friday round table discussion.
The legislative majority leaders’ round table served as a sounding board for ideas as the General Assembly prepares for a special legislative session focused on job growth.
While the “First Five” program, a product of the last session, has focused on offering incentives to large companies promising to create at least 200 jobs, the idea that the state needs to do more to shore up its smaller companies kept coming up at the meeting.
David Pepin, founder of Next Generation Ventures LLC., said the state should find ways to encourage venture capital firms to contribute to all levels of start-up businesses.
Pepin said there have been instances, referencing one small start-up in New Haven, where firms outside the state have offered to invest in these businesses with the condition they move. A California-based venture capital firm offered the company a total of $8 million to move to that state.
He said similar start-up businesses need more funding from state’s venture capital firms in order to stay in state, but many of the firms are not looking to make small investments. Rather, prominent firms seem to prefer making large investments to international businesses, he said.
Elliot Ginsberg, director of the Connecticut Center for Advanced Technology, said the state should look to help medium sized businesses as well.
He said too much of the focus has been on larger businesses, especially through the “First Five” legislation, but there needs to be support and resources for the smaller businesses already here so they can become more productive.
“Part of the focus may just be how we address the needs of the 25-50 person firm over X amount of time,” said Ginsberg. “They stand to grow, the numbers won’t be significant in terms of absolute but it will percentage wise.”
He noted despite recent declines, the manufacturing industry in the state, encompassing many 25-50 employee businesses, could help in economic recovery in the future if they receive resources and other support.
The group agreed the state must make efforts to help the businesses within the state grow, but they suggested there is also a need to bring in outside businesses.
While other states aggressively seek to bring out-of-state business into their states, Bill Cibes, former Office of Policy and Management secretary, said that Connecticut should not aggressively attempt to “poach” business.
Gov. Dannel P. Malloy said Tuesday that his administration is in talks with some out-of-state manufacturers, whom he hopes to draw to Connecticut with through the “First Five” initiative. But moving a business into the state is a process that takes more time, he said.
Cibes said the state should opt instead for better marketing. He said it should focus on positive aspects, including the low tax burden businesses face, when attempting to attract outside business.
Lyle Wray, executive director of the Capitol Region Council of Governments, said competing states have proven they’re willing to do much more to bring in outside business.
While the discussion focused on key issues in promoting business and job growth, several factors that hinder job growth including high energy, transportation and healthcare costs were ignored.
A recent report by the Council on State Taxation found that Connecticut had the lowest business tax burden in the country last year.
Summarizing the report, Wade Gibson, a senior fellow at the nonprofit CT Voices for Children, said the high cost of energy, healthcare and transportation factor more heavily into the operating cost of the average business than taxes. He called on the governor and the legislature to take steps to address those issues during the special session.
None of those issues were discussed at Friday’s meeting.
Afterwards House Majority Leader Brendan Sharkey, D-Hamden, said those issues will play a role in the special session at “one level or another.”
“Clearly, those are issues that go into the question of how we grow our state and grow jobs in our state,” said Sharkey. “It’s really a question of seeing what roles those issues play in the overall issue of creating a more hospitable environment for growing jobs.”
Tags: jobs, Sharkey, special session
(7) Comments
posted by: Specter | August 8, 2011 7:24am
The majority of jobs in an economy are created by small businesses. “First Five” is a complete joke foisted on all of us by Malliar and his minions. So what - promise 200 jobs and get multi-million dollars of tax incentives? The last one was ESPN and was announced the day of ground-breaking on the new project. That tells us two things - first, the project was well along before the “first five” BS came along. No company jumps to a major development in weeks - it takes months and years of planning. Second, it’s really telling that JC Penney announced 400 layoffs the same day. So - net loss of jobs. If you want to help small businesses stop passing laws like mandatory sick time and the gag order. Get rid of the Business Entity Tax. Help small businesses rather than punishing them.
posted by: JAM | August 8, 2011 9:00am
Interestingly the word “profit” is never mentioned. Connecticut will not grow its private sector (and jobs resulting therefrom)without creating an environment that allows investors to make a return on their investments. That’s what’s missing from this discussion, and that’s what’s been missing from state policies for years.
posted by: Careful | August 8, 2011 11:22am
We are in trouble—when our state political leader Governor Dannel Malloy—doesn’t have a clue on how to create business—and our Connecticut General Assembly—is only in tune with wasteful spending! We have a losing combination in this state, “Not Smarter Than Fifth Graders!”
Our dual political nightmare is a continual bad dream beset on our sinking State of Connecticut, who only know how to raise everyone’s taxes! It’s all our fault, as we picked this motley crew—wo are leading us to NOWHERE!
posted by: DirtyJobsGUy | August 8, 2011 12:13pm
Taxes are high in CT (not just income but fuel, excise and property taxes) but a worse problem is regulation. Just follow the press accounts of any business trying to expand in CT. There are hearings, permits, activists opposing just about everything, unions demanding who knows what. And here you area as a business trying to get the new operation up and making money instead of just paying out. Time is money not just in interest but in peoples time, lost sales opportunities and more. To many of CT residents oppose anything that would add one more car or truck to the roads or displace one blade of grass.
This occurs even in areas zoned for business since the activists will use any technicality to oppose the projects.
Much easier down south where granted there is more land, but also people are more interested in the economic development than CT.
Instead of handing out tax credits how about helping new businesses get permits, access roads and utilities? This is the classic role of government and is sorely neglected here.
posted by: Really? | August 8, 2011 12:19pm
“To encourage job growth, Democratic and business leaders suggested…” This is how the article started. Where are the republicans? Is this another special interest, partisan effort? Let’s see some collaborative efforts. And I’m sure the Council on State Taxation rankings didn’t take into account the new laws just enacted like mandatory sick time…besides, it’s cleverly disguised and not a tax so it doesn’t qualify in the calculations I’m sure.
posted by: NOW What? | August 8, 2011 2:00pm
It is high time that the needs and problems related to “growing” Connecticut’s small-to-mid sized businesses were addressed; in fact it’s LONG overdue.
The author is *absolutely* correct in pointing out that Connecticut’s problems of high energy, transportation and healthcare costs were ignored and that they MUST be addressed if the state is to ever see substantial growth in such businesses… these are far more important than even the availability of funding from venture capital firms. But regarding transportation, it’s not just more *affordable* transportation that’s needed - it’s transportation PERIOD that’s needed, particularly readily available HIGH-SPEED transportation to New York City and Boston, more non-stop flights to other states’ major airports, increased flights to and from New Haven’s airport, and easier access to major trucking routes from CT’s more “rural” areas (where greater availability of affordable and larger tracts of land are available for industrial construction).
“Regulation” per se is NOT a problem in Connecticut, contrary to popular opinion - Connecticut’s business and construction - related regulations are no more burdensome than most any other state’s are; in MANY cases they are actually LESS burdensome in Connecticut. And the Business Entity Tax is *insignificant*, stopping NO one from starting a business… virtually every state has such a fee; it’s a non-issue.
But what IS an issue is not just the high cost of health insurance in Connecticut, but the high cost of ALL professional services in Connecticut *including* medical services. The Governor and General Assembly MUST begin to address these issues in a truly meaningful way, and as quickly as possible. Opening its State employees’ health insurance group to small businesses would be a good start, but only a start.
posted by: Puzzled... | August 10, 2011 11:49am
I’m not so sure that relying primarily (let alone exclusively) on encouraging the private “venture capital” investment business as a solution to the problems of the state’s small businesses would suffice (although it certainly would be helpful regarding the need for new businesses’ adequate start-up capital). New small-to-mid sized businesses need some sort of local property tax breaks, and they need access to relatively young but appropriately educated and/or trained workers (for the type of business and jobs created) who’d be both willing and able to start off working for somewhat less-than-“standard” wages with the expectation that if the business succeeded they’d then be granted better salaries (maybe a decent benefits package would help encourage such prospective employees to go work for such new businesses at lower rates of pay, like maybe something that offered reimbursement towards further education or certified training costs).