This post was contributed by a community member. The views expressed here are the author's own.

Business & Tech

Business Leaders Say State Not Really Open For Business

Taxes, Regulations And Cost Of Living Hinder Job Creation

The world’s largest armory once sat alongside the Connecticut River and produced 1,000 arms a day. 

Today, Sam Colt’s factory town is destined to become a national historic site celebrating past productivity. And so the elegant brick building, topped with a cobalt onion dome, cast a shadow over the Capitol during last month’s Connecticut’s Manufacturing and Technology Day. 

The nearly 40 exhibitors gathered under the Rotunda reminded legislators the state needs manufacturing jobs. Yet, many businesses and legislators said the state lacks a coherent business plan. 

Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.

“I don’t think it has one at all. It’s sad and pathetic,” said state Sen. L. Scott Frantz, a Republican who represents New Canaan, Stamford, and Greenwich in the 25th Senate District. 

 

Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.

Legislature Needs an Attitude Adjustment

That worries Katherine A. Saint, president of the Bridgeport-based Schwerdtle Stamp Co. The 132-year-old company employs 24 people from several locales including Greenwich, Fairfield, Shelton and Naugatuck. 

“I liked well enough his experience in Stamford,” Saint said of Gov. Dannel P. Malloy. “He was always fighting for jobs. He campaigned for ‘jobs, jobs, jobs’. But now it seems he is talking but he isn’t listening.” 

“I think the legislature will have to completely change its attitude about business,” said Eileen Banishch, the executive director of Madison’s chamber of commerce. “The attitude is that it just seems to be anti-business.” 

But the combined forces of a recession, Malloy’s proposed budget, and the Senate’s vote to pass the nation’s first mandated paid sick leave pose great challenges, Saint said. 

For example the proposed budget will raise the top income tax rate to 6.5 percent. That affects companies like Schwerdtle, which are classified as sub-S corporations because they file their income through personal income tax. 

These measures make it hard to reinvest or to hire new employees, Saint said. 

“We’re not here because we like doing business in Connecticut,” Saint said. “We’re here because it’s a highly skilled workforce and we have loyal, wonderful people here. So I’ve got to make do.” 

 

A Story of Loss

Connecticut has lost more than 1,000 firms in the last 20 years. The number of manufacturing jobs declined from 300,000 to about 170,00, said Pete Gioia, a vice president and economist for theConnecticut Business and Industry Association, CBIA. 

Still, Gioia said Connecticut’s manufacturing hasn’t been entirely gutted. 

True Sturm, Ruger, the firearms company, only maintains corporate headquarters in Southport. And the Norwich-based Smith and Wesson left long ago as did the New Haven-based Winchester Repeating Arms Company.

But other manufacturers remain, including Fairfield-based Bigelow Tea; Groton-based General Dynamics/Electric Boat; West Haven’s The Lighting Quotient; and South Norwalk’s Penmar Industries Inc.

“We have lost our fair share of pure manufacturing but there have been certain modern developments that have taken place (in the area),” said Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut.

Sheridan said New London County has many businesses tucked away, such as software development and research firms.

Connecticut has 4,826 manufacturing establishments, according to the US Census Bureau. Its top five exporting areas are transportation equipment, industrial machinery, fabricated metal, electronic equipment chemicals and food products according to national association of manufacturers.

Manufacturing is vital to the state’s economic health because each new manufacturing job creates between 1.9 and 4 other new jobs, according to CBIA. 

“Who creates the jobs? Everybody knows that small business creates jobs,” Saint said. “You want stability? It’s the little guys like us who do it. We’re the last ones to lay people off. If you want long term jobs you need to stimulate small business.” 

 

There Is Some Growth

According to the state Department of Labor April saw 7,900 new jobs. Of these, 3,800 are in health services followed by 3,700 in trade, transportation, and utilities. Leisure and hospitality accounts for 2,200 jobs; construction and financial for 1,100. 

General Dynamics/Electric Boat expects to hire a few hundred engineers in the coming months, said Robert A. Hamilton, director of communications. The new hires will occupy property that Pfizer recently vacated. 

However, keeping these jobs here isn’t easy. 

It’s a multifaceted problem where taxes tell only part of the story, Gioia said. 

“Connecticut has a high standard of living and strong environmental laws that in part cause the cost of living to be higher here and the cost of business,” said Sheridan. “On the same token, we want the clean air and we want the clean water.” 

Many prospective companies don’t like the state’s high health care costs and permitting process. Others worry about the paid sick leave legislation. The state’s high-energy costs rankles others, he said. 

“Number one it’s the overall cost of doing business here and I’m not sure the politicians on the whole get it,” Gioia said. “Connecticut is an extremely costly place to do business. A much more comprehensive effort is needed to deal with the totality of doing business here.” 

 

13th Worst in the Country

Ernst & Young LLP recently ranked Connecticut as 13th worst in the country for state and local tax competitiveness. 

“Seriously we're just driving people away. It's difficult for young families to live here,” said Banishch. 

And so businesses continue to decamp. Pfizer’s recently announced 1,100 layoffs from it Groton campus. Hamilton Sundstrand of Windsor Locks sent more than 200 union workers packing. 

Frantz, who sits on the Commerce Committee, said everything from “onerous” regulations to high income and corporate taxes mean one thing: “Connecticut really is not open for business.” 

Banishch agreed, despite of the state’s convenient proximity to Boston and New York. 

“We do have space available but if you want to open a business, and you're looking at all the different states, Connecticut’s not where you going to come,” she said. 

During his inaugural speech Gov. Dannel P. Malloy proclaimed the state open for business and introduced his “First Five” initiative that would give tax credits to the first five businesses that create 200 new full-time jobs in next two years.

We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?