Connecticut economy is going to be sunny side up again
Connecticut has seen hard times since the Great Recession, with the loss of General Electric in Fairfield and droves of workers leaving the state to find jobs elsewhere, but those hard times may be coming to a close soon, according to a leading economy watcher.
What’s happening to the state that may improve the business climate, and therefore the economy for all, is that balance has finally come to the state legislature, said Brian J. Flaherty, senior vice president of the Connecticut Business & Industry Association, based in Hartford. After many decades of Democratic domination, the state House is almost at parity and the Senate has even numbers of Republicans and Democrats.
It also doesn’t hurt that Gov. Dannel Malloy began the legislative session telling legislators that Connecticut needs stability, predictability, and affordability in spending and taxes. A week later, he took the same message to the CBIA Economic Summit. "This is exactly the message the legislature needed to hear and that Connecticut's business community needed to hear," Flaherty said later.
Stability and predictability at the Capitol drive confidence to create and sustain jobs in our state, he said.
That stability was not present in the last two years in the legislature, and in fact it was the Governor who not only sparked the rollback of some of the legislature's 2015 tax hike, as well as insisting on using only spending cuts to eliminate the $900 million budget gap in 2016.
He spoke during the annual Eggs and the Economy breakfast sponsored by the Wilton Chamber of Commerce and attended by about 40 people on Jan. 19 at Marly’s Bar & Bistro in the town center.
“Today we had scrambled eggs, but a year from now, if I’m back to speak again here, I hope to be able to say the economy is sunny side up,” Flaherty told the crowd.
State Rep. Gail Lavielle, R-143, who briefly attended the event, agreed later that change is coming to Hartford.
“The Connecticut legislature, and particularly the House, has been moving recently toward greater balance, and now it is very close to parity. I agree that this augurs well for the state. With one party in control for several decades, and little or no change in fundamental fiscal policies, the state’s finances have deteriorated,” Lavielle said. “Both parties agree on the seriousness of the situation. I hope that greater legislative balance will lead to consideration of different fiscal policies that will improve the state’s finances and economy.”
When it comes to starting a business, Flaherty’s knowledge runs in the family. His great-grandfather, he explained, was one of the founders of the Peter Paul Candy Co., formerly of Naugatuck, in the early 1900s.
“Six men had an idea for a business. All they had to do was find a bank to loan them the money to build it,” he told the audience. That loan was denied in New Haven, where the men wanted to set up the candy company, but they were welcomed with open arms in Naugatuck.
“Ask yourself, in today’s Connecticut, would someone with an idea feel the same way about the opportunities here and follow through on it?”
Flaherty is in charge of public policy at the CBIA, the state’s leading business organization. In addition, he has a background in both corporate and government experience, having been vice president at Nestlé Waters North America and having served as an eight-term Republican member of the Connecticut House of Representatives.
In his talk, he said the state has recovered only seven out of 10 jobs lost in the Great Recession, while neighboring states have gained many more jobs back. At the same time, Connecticut’s pace of economic growth, measured in the total value of goods and services, has grown by less than 1% a year, while other states have seen robust growth.
However, the changing political winds that have swept the nation and the state have brought more Republicans into state government, and he said the balance that has long been missing is the business community’s best hope for a new chance to make Connecticut succeed.
High taxes are the last thing the business community needs, he said. The minimum wage of $10.10 an hour is already too high for some small businesses to handle, and there should be no further increases in the bottom wage until the state economy shows some growth, he said.
He did not mention the impact of a change in Washington, D.C., at all, not even in passing, regarding the new Republican president, Donald Trump, who has a Republican majority in office with him.