Opinions mixed about what GE move means for Connecticut

2 photos
Save Story

Estimated read time: 3-4 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

HARTFORD, Conn. (AP) — Criticism of Connecticut's business climate and policies came swiftly following the news that corporate giant General Electric would be moving its headquarters from suburban Fairfield to Boston.

The state was dubbed Connectitax in a Wall Street Journal editorial on Thursday. MSNBC's Joe Scarborough went on air and proclaimed his home state "absolutely in tatters," partly blaming two successive major tax increases.

Meanwhile, the Republican leader of the Connecticut Senate, Len Fasano, warned that other companies will follow GE's lead unless major, structural changes are made to the state's budget, which has been dogged by deficits since the recession nine years ago.

But legislative Democrats, who control Connecticut's General Assembly, contend Connecticut is making progress toward growing jobs and fixing its financial house. They note that Connecticut will remain the top state for Fortune 500 company headquarters per million residents, home to 16 headquarters including Aetna, United Technologies and Xerox.

"Those who would seek to paint GE's departure as an economic referendum should have their motives examined very closely," said Senate President Martin Looney, D-New Haven, who contends GE's move has nothing to do with taxes or business costs, but more about the company's business strategy.

Even the head of the state's largest business organization, Joe Brennan, concedes that tech-rich Boston might be better-suited in some ways for GE's ambitions to be a global technology leader.

"So much of the focus for these companies is on talent, recruitment and retention," Brennan said. "And the fact that Massachusetts, particularly the greater Boston area, has so many world-class higher education institutions makes Massachusetts attractive."

Brennan said that's why his Connecticut Business and Industry Association has supported the state's efforts to upgrade the University of Connecticut and other higher education institutions, which he said can be "a game-changer" for firms.

With the start of the Feb. 3legislative session approaching, the Democratic-controlled General Assembly and Democratic Gov. Dannel P. Malloy must decide how to ensure Connecticut's business environment meets the needs of an evolving economy and change the narrative that Connecticut is an expensive, stodgy state that's burdened with fiscal problems and losing hundreds of jobs to a bordering state once dubbed Taxachusetts.

"I think GE would take the position that their movement out of the state of Connecticut is hopefully the wakeup call this building needs to make changes," Fasano said, referring to the state Capitol.

Malloy said his administration offered GE a "highly competitive" incentive package, in hopes of encouraging the company to remain at its Fairfield campus. For example, he said, state-funded improvements to a nearby airport in Oxford and helicopter transportation to New York-area airport were offered.

"We've won a lot of these fights for companies from other states, but we're not going to win every one," the governor said.

He said GE's decision shows Connecticut "must continue to adapt to (a) changing business climate," reform its state budget, pay down funded pension liability, upgrade transportation infrastructure, and continue investments in higher education, high-tech startups, bio-science, digital media, insurance and advanced manufacturing.

Brennan said discussions he's had with GE indicate the company has been frustrated for years about the uncertainty and lack of predictability with Connecticut's budget, the "lurching between tax increases and deficits." He said last year's business tax increases, which prompted GE to threaten moving out and led state lawmakers and Malloy to scale back some hikes, was a "catalyst" to GE deciding to finally leave.

Brennan acknowledged Connecticut has made recent progress, such as recouping jobs lost in the recession. But he said that progress needs to be accelerated by addressing costs for businesses and the looming budget deficits that are stopping new mandates.

"We've got to make an environment here where more companies want to come here," he said. "And not just that they're here, but they want to stay here."


This story has been revised to correct the spelling of Joe Scarborough's last name.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Most recent Business stories

Related topics



    Get informative articles and interesting stories delivered to your inbox weekly. Subscribe to the KSL.com Trending 5.
    By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

    KSL Weather Forecast