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Connecticut's Open Season On Business

Michael D. Nicastro

May 28, 2011

Those of us in the business community can still hear January's echoes as the new administration declared, "Connecticut, open for business." Well here we are just about to enter June and somewhere along the way that message has faded away.

You have to wonder whether that grand proclamation was sincere or just a veiled cover for what has become our reality. Because the message we're living now is, "Connecticut, open season on business."

Just look at the bills working their way through the General Assembly or the lopsided nature of the budget "deal" that the administration struck with the state employee unions to understand that it's been hunting season on business all along. Here are a few examples.

Captive Audience: A better name for this bill would have been "Welcome to Connecticut, the state where business wears a muzzle." With a state economy that remains dead and suffers from astronomical unemployment, the legislature sees as its mission the need to tell businesses large and small that the state will decide what subjects will be acceptable for them to discuss with their employees.

The concept is ridiculous and likely unconstitutional. But more insidiously, it strengthens the belief that businesses and their owners are to be reviled: Employers are the enemy and only organized labor can speak to employees - statewide de facto unionization.

Paid Sick Leave: During the public hearings on this bill, business owner after business owner spoke about the costs and job losses that such legislation would create. These were not back of the envelope guesses but highly detailed estimates of the costs from this legislation. Yet the bill moved through committees as though no one had ever testified against it.

Buyer's Tax: Is there anything more dead than the current housing market? So just to make sure that we pull more buyers out of the market and drive the real estate market deeper into depression, the legislature will be voting on a 1 percent tax on the buyer in a real estate transaction.

Remember the temporary, now soon to be permanent tax on the seller that was enacted a couple of years back? Well now it's the buyer's turn. To be concise this new tax starts on the amount above $150,000. But with pending federal legislation that would require a 20 percent down payment, this extra tax will do nothing more than help keep the real estate market depressed.

Collateral Damage: It's not just anti-business legislation that is placing a bull's-eye on business. Go no further than the collateral damage that will be caused by the proposed "concessions" that are part of the budget deal.

In that deal (if ratified), all state employees and retirees will be required to purchase prescription drugs by mail order. A nice deal if you're Caremark/CVS but not so great if you own and operate a small pharmacy. For the small pharmacy this alleged $26 million savings will result in a significant loss of business and for some either the end of their business or at the least a need to reduce staff, more lost jobs while state employees enjoy six straight years of no layoffs, guaranteed.

Just another deal made with no concern for the collateral damage it causes. Never mind that most studies prove that mail order for prescription drugs is actually not a lower cost solution.

In the end, what started out as a hopeful year has turned into one of the most anti-business years ever. What does it say when a Connecticut business packs up and heads to Massachusetts because it's easier to do business there? When our neighbor to the north is viewed as more business friendly, Connecticut is in deep, deep trouble.

For the surviving businesses, the good news is that "hunting season" ends June 8 when the legislature adjourns. Hopefully it won't extend the season with a special session.