We salute the governor and legislature on the bold initiatives in their budget proposals. We urge all parties, however, to adopt a budget that ties increases in state spending to inflation and the rate of growth in the state's economy.
Fiscal discipline is critical to sustaining a pro-growth environment and ensuring Connecticut's competitiveness.
In 1991, in the face of a $1 billion budget deficit, chambers of commerce, the Connecticut Business and Industry Association and other leaders supported a personal income tax - if a constitutional spending cap was enacted simultaneously.
Public- and private-sector leaders agreed back then that the state's severe fiscal crisis called for dramatic action. It is vital that we remain true today to that pledge of fiscal restraint by holding the line on spending.
Fiscal discipline is integral to the private-sector job growth that is the bedrock of a dynamic economy. Connecticut is considered a less-than-ideal environment for business investment, a reality underscored by a 2006 study by the Connecticut Economic Resource Center.
In fact, the state's most significant job growth in the past six years has been in the government and services sectors. A benefits package for a new government employee is more than 60 percent of his or her base compensation - a cost that exacerbates the looming crises of unfunded retirement and health care liabilities at the state and municipal levels.
Meanwhile, manufacturing jobs have been steadily decreasing since 1998 at a rate of more than 450 jobs per month. There are 10,000 fewer jobs in the insurance and financial services sector than we had in 1989. We have also seen a steady erosion of information, trade, transportation, construction and utility jobs.
When coupled with proposed legislation that would levy health care provider taxes, restrict employers' freedom of speech in staff meetings, and mandate paid vacation leave and sick time, the proposed increases in state spending compound the disincentives for businesses and entrepreneurs to stay in or move to Connecticut.
The fierce national and international competition that we face for jobs, capital and talent demands that Connecticut respond with imagination and creativity. Other states continue to recruit our largest employers and most successful companies by marketing their business-friendly environments and fiscal discipline. For Connecticut to compete in the global arena, we must move the debate from how much more we should spend, mandate and tax to how to grow jobs, attract capital, and retain and recruit young talent.
We recognize that Connecticut has significant challenges in providing affordable health care and housing, in education and transportation, and in the cost and availability of energy resources, all of which must be addressed to sustain a dynamic economy. These challenges can be met by developing strategic spending priorities within fiscally responsible budgets.
Oz Griebel is president and chief executive of the MetroHartford Alliance.
Reprinted with permission of the Hartford Courant.
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