State Is In Dire Need Of Climate Change – For Business
September 06, 2009
With the recent announcement that Pratt & Whitney is evaluating whether to relocate 1,000 jobs, some elected officials proclaimed that we must, at all costs, keep well-paying manufacturing jobs in Connecticut. Given that well-paying jobs have been leaving Connecticut for many years, we can only hope that the magnitude of Pratt's potential loss will produce meaningful and constructive state action to match those words.
Indeed, we must react with a sense of urgency to this latest wake-up call and aggressively address Connecticut's woeful economic direction. Gov. M. Jodi Rell deserves credit for her efforts to retain the Pratt jobs, but rather than react to announcements of job relocations, our elected officials must establish a climate that causes businesses to retain current jobs and create new ones.
As Pratt's situation clearly demonstrates, the national and global competition for high-paying jobs increases daily. Connecticut will remain a shrinking bystander without a more competitive business environment.
When a company moves jobs to other locations, the easy political reaction is to demonize it. But companies move so that they can continue to produce quality products demanded by the marketplace at the lowest possible cost and generate a good return to their shareholders. Companies that fail to compete will suffer, as has been painfully manifested by every company in the U.S. auto industry.
Connecticut has a highly educated and productive workforce along with many other assets attractive to business, and yet, as CNBC and other sources have noted, we are among the most expensive states in which to do business. We have high energy, health care, labor and tax costs which, coupled with a challenging regulatory climate, significantly impede job growth and capital investment.
The belatedly passed $37.6 billion biennial state budget only exacerbates this impediment: It fails to identify adequate spending cuts or to streamline government. Instead, it raises taxes and adds inappropriately to the state's debt load. That combination, at a minimum, will reduce the prospects for job retention and creation over the next several years — and worse, will hasten job eliminations and relocations.
In addition to providing the employment necessary for individuals and families, a dynamic and expanding private sector is crucial to Connecticut's superior quality of life. The taxes paid by businesses and their employees fund our state and municipal services, and their contributions of money, time and talent are the foundation of our arts, cultural, educational and social service organizations.
To preserve that high quality of life and to retain and increase the number of well-paying jobs on which it is based, we must find ways to help our current and prospective employers to be competitive in today's world. While the task will not be easy and will require imagination and perseverance, a successful effort is essential to our future.
To that end, we urge the governor and the General Assembly, as we did during the extended budget negotiations, to address the state's structural fiscal deficits and give businesses confidence that a more competitive and predictable cost and tax structure will exist in the years ahead. Such confidence is a prerequisite for the private sector to continue to invest in Connecticut.
We specifically recommended on June 12 that the governor and the legislature establish a group of Connecticut leaders to evaluate a menu of dramatic actions and to deliver to the governor and the legislature, by Jan. 15, a blueprint of specific actions and an accompanying timetable that address the structural deficits.
Our position paper, which can be found at www.metrohartford.com, clearly recognizes that Connecticut is not entitled to investments or jobs, either on the basis of history or sentimentality, but that we must compete aggressively for both.
Establishing a truly competitive environment that generates well-paying jobs will require an intense and coordinated effort, an effort that we owe ourselves and future generations. Let's wake up and get on with it.
Reprinted with permission of the Hartford Courant.
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