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Anti-Business Cloud Still Hangs Over State

Hartford Business Journal Editorial

June 13, 2011

Ever since Gov. Dannel P. Malloy lit up the business community with his proclamation that “Connecticut is open for business,” the line has been both a touchstone and a punch line.

An alphabet soup of business-conscious interests — from CBIA to NFIB and GOP — have asked the rhetorical question of whether the state is truly open for business each time a bill that hurt business advanced. They made their points but won few victories.

In the broad sense, it’s a silly question. Of course the state is open for business, in the same philosophical sense that everything is for sale at the right price. It’s just a matter of the terms. And today we’re playing on labor’s terms.

The real question, now that the Legislature has closed shop, is whether the notoriously anti-business cloud that has hung over the state has been lifted appreciably by anything that’s been done.

The verdict is clearly no. Not 100 percent no; not resoundingly no; but clearly no.

Start with inflicting the largest tax increase in the state’s history and becoming the first state in the nation to mandate paid sick time. Sure, the tax plan is part of a bigger plan to stabilize the state’s finances, which is a good thing long-term, and the watered down paid sick time scheme affects few. But that’s fine print. The headlines were devastating.

Then there’s a litany of social-issue legislation that reads like a medley of California hits — decriminalizing marijuana, new rights for transgenders and undocumented immigrants, early release of prisoners. There are plausible arguments for each, but again, that’s the fine print.

Impressions are formed by the headlines and those aren’t favorable to rehabilitating Connecticut’s image. We look like an East Coast version of the mess even “The Terminator” couldn’t tame in California. That state, by the way, is so far in the hole Gov. Jerry Brown is talking about a short-term “tax bridge” to keep the doors open until he can get a major overhaul scheme in front of voters.

Connecticut’s business climate is not going to have businesses lining up to move here without major economic inducements. And that’s just the kind of game-changing incentives the “First Five” program is designed to provide.

And “First Five” is just one reason to see hope.

There are signs the state’s flirtation with tax credits to spur venture capital investment is paying dividends, as Greg Bordonaro reports on this edition’s front page.

The ongoing reorganization of economic development activities under a business-savvy leader — Catherine Smith — is encouraging. So is the streamlining of some regulatory processes and the freeing of Bradley International Airport from some red tape.

But for all the pro-business rhetoric, this has been a disaster of a legislative session.

When push came to shove, the Democrats gave labor what it wanted — a showcase win in paid sick time and a concession arrangement that nickel-and-dimed its members while giving the illusion of making a big contribution to solving the budgetary problems.

Malloy could have asked for temporary tax increases tied specifically to resolving the budget crisis, but he didn’t. He could have persuaded labor to wait a little longer on paid sick time, but he didn’t. He could have bitten into the scope of state government, but he didn’t.

So is the governor really the Malloy of the pro-business rhetoric or the Malloy of the pro-labor actions?

We continue to believe Malloy understands the business argument better than his predecessors and he wants to create jobs. He just may not be strong enough to stand up to labor and to make the tough choices that would allow him to shrink state government, reduce regulation and stabilize taxes so that business can get a better foothold here.

And that’s not a good sign for the future of Connecticut business.