We heard a lot about GE last week. But what we didn’t hear was more telling.
In Connecticut, we heard much discussion of why GE decided to move, and many opinions about who and what are to blame. None of this was surprising, and much of it had to be said.
More disturbing, however, has been the drumbeat of negative coverage by the national media, which culminated this week in a Wall Street Journal article entitled, “GE Escapes Connectitax: The company flees the high-tax state that hates business.” While the title is particularly acerbic, the article can’t be dismissed as merely a reflection of one paper’s bias. The Hartford Courant has been equally outspoken. So has much of the national broadcast media.
Whatever the reason for GE’s decision — tax policy, other financial and regulatory issues, lack of a dynamic urban setting, or, most likely, a combination of all of these — Connecticut has now acquired a reputation as a place where businesses are punished, undervalued, and even vilified, and policy makers aren’t interested in changing course.
While opinions vary on whether this perception reflects reality, many in the business community, both in and outside Connecticut, unfortunately now believe it does.
The consequence for Connecticut is undeniable: businesses that might consider moving or expanding here will be more and more reluctant to do so, and many of those already here will increasingly doubt the wisdom of staying.
Effective leaders in similar situations often display a frank willingness to look inward, recognize that there’s a problem, and communicate an action plan to address it. This is, for example, what ad agency chiefs do when they lose a high-profile account; what nonprofit board chairs do when a loyal donor exits; what major league coaches do when their team is on a losing streak. They do it to show the market that they’re still in the game, and to reassure clients, donors, and investors that they value their allegiance and are determined to keep it by improving their performance.
It’s hard to imagine a leader in one of these situations saying, “This is a sign that we should continue doing what we’re doing.” But that’s what happened in Connecticut last week.
Legislative majority leadership simply denied the existence of a problem. One quote: “It is an undeniable fact that Connecticut’s economy is growing and creating jobs and we are training our workforce to compete in a global economy.” And another: “It is clear that GE’s decision has nothing to do with taxes, or even business costs, and cannot fairly be viewed as a referendum on Connecticut’s growing economy.”
The response from the executive branch acknowledged that GE’s news was disappointing, and then explained that the state’s policies have been moving in the right direction. The statement that “Today’s decision is a clear signal that Connecticut must continue to adapt to a changing business climate,” was followed by a list of things the state is already doing.
Where was the recognition of possible deficiencies? Where was the willingness to look inward and examine how closely current policies correspond to what businesses expect? Where was the plan for what might constructively change going forward or the invitation to businesses to help develop it?
Of course no statement would have changed GE’s decision after its announcement. The point is that last week’s communications are a clue to the bigger picture of what’s behind negative perceptions of Connecticut, and may help explain, even to those who still believe the state is sufficiently business friendly, why its reputation is under fire.
What we didn’t hear last week is the latest example of what businesses have been missing for several years: serious attentiveness to their concerns, recognition that major policy changes are necessary, and a partnership mentality that embraces businesses of all sizes instead of a putting-out-fires approach that targets a select few. Instead, what businesses heard, and have been hearing all along, was that Connecticut’s leadership is determined to pursue its agenda without regard for what business decision-makers think of it.
This is a message that could suck the lifeblood out of any economy. The business disaffection it has spawned is hurting everyone in Connecticut.
State Representative Gail Lavielle (R-143) represents Norwalk, Westport, and Wilton.