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Serious Budget Instills Confidence

Dannel P. Malloy

February 27, 2010

In the weeks leading up to my budget, and indeed in the speech I gave that day, I said loudly and clearly that "Connecticut is open for business." But what does that really mean?

The budget I was handed on Nov. 15 was $3.5 billion out of balance. It was absent any federal stimulus dollars that were available to the states last year; it used "surplus" dollars in name only — it was still running a deficit — and it included $647 million in borrowing to pay operating expenses. That's like using a household credit card to pay for things with money you don't have, instead of using a debit card and paying for things with the money in your checking account. It just doesn't make any sense.

Talk to any business owner — small or large — in our state, they can tell you that Connecticut is not fostering an environment that gives them the confidence to expand or stay. In fact, Connecticut has about the same number of jobs we had in the fall of 1997, and almost 100,000 fewer than we had in early 2008.

Before we talk shop with companies that may choose to locate here or expand, they need to have enough confidence in our state's finances to know that we won't keep kicking the fiscal can down the road. That's what my budget does. It's not pretty, it's not easy, but it's honest and it shows companies that we're serious about getting our fiscal house in order.

So, now that we've taken a long, cold shower and we fully realize the magnitude of our situation, where do we go from here? The big news on the day I proposed my budget was how we actually got to closing the magic $3.2 billion deficit number. But, in addition, there were a number of proposals in my budget that I believe will help our government attract and retain jobs in Connecticut in the months and years ahead.

The "First Five" initiative offers powerful motivation to the first five companies that bring at least 200 new jobs to Connecticut. This program takes our best job creation tools, such as the Reinvestment Tax Credit, the Manufacturing Assistance Act and the Job Creation Tax Credit, and allows them to be combined and the benefits increased for companies that bring more than 200 new jobs to the state. Importantly, we will hold these First Five recipients to their commitments with mechanisms to ensure that the jobs and investment we support will last.

Another proposal included in my budget allows companies to "unlock" their existing unused credits — thereby freeing them from the 70 percent credit redemption cap, as long as they create net new jobs.

And although my restructuring proposals may, at first glance, look to be a way simply to save some money, they serve a larger, more coordinated purpose as well. Currently, there are at least six separate agencies or commissions — in addition to the Department of Economic and Community Development — that are charged with economic development.

What sense does that make? Is our right hand talking to our left? As part of this restructuring, we moved several functions at the Department of Labor to the Department of Economic and Community Development, so that we could package job training with incentives and focus those activities in areas where we have identified growth potential. It's not rocket science; it just makes more sense.

When I say, "Connecticut is open for business," it's not a tagline or a catchphrase. It's the way in which our government will operate, so long as I am the governor. For too many years, we've been saying the right words, but we've been doing the wrong things. That stops now.

We need an honest, transparent budget that crunches the numbers and asks for a sacrifice from us all. But we also need innovative and new ideas to help spur job creation and growth and show companies that we mean business. From now on government will exist to help create jobs, not just to perpetuate itself.

Dannel P. Malloy is governor of Connecticut.