Stamford Advocate

High Cost of Business Unfriendly climate: Panel told state taxes, regs stifle growth

John Hannigan with Choyce Peterson, Inc. in Stamford and Howard Schwartz with Better Business Bureau, Inc. listen to a panel discussion on business and state policies held at the Norwalk Inn & Conference Center in Norwalk, Conn. on Tuesday, Jan 31, 2012. State Sen. L. Scott Frantz,  U.S. Rep. Jim Himes, State Rep. Larry Cafero,  Joe Brennan, senior VP of public policy at CBIA and David Lewis, president and CEO of Operations Inc., made up the panel. Photo: Cathy Zuraw / Stamford Advocate
John Hannigan with Choyce Peterson, Inc. in Stamford and Howard Schwartz with Better Business Bureau, Inc. listen to a panel discussion on business and state policies held at the Norwalk Inn & Conference Center in Norwalk, Conn. on Tuesday, Jan 31, 2012. State Sen. L. Scott Frantz,  U.S. Rep. Jim Himes, State Rep. Larry Cafero,  Joe Brennan, senior VP of public policy at CBIA and David Lewis, president and CEO of Operations Inc., made up the panel. Photo: Cathy Zuraw / Stamford Advocate

By: Richard Lee

The administration of Gov. Dannel Malloy has begun some key initiatives to stimulate the state's economy and encourage business growth, but some members of a panel gathered by a Connecticut business association questioned whether it is enough.

State Rep. Lawrence Cafero Jr., R-Norwalk, and state Sen. L. Scott Frantz, R-Greenwich, on the panel organized by the Connecticut Business & Industry Association and the CEO Roundtable that met Tuesday at the NorwalkInn & ConferenceCenter, told an audience of 70 representatives of businesses and non-profit organizations that more needs to be done.

"I take my hat off to the governor. He's probably the hardest working person in Hartford," Cafero said, but he warned that the state may be still headed toward a deficit, despite a combination of tax increases and union give-backs. "You cannot spend more than you make."

The essential ingredient to developing a balanced budget is creating a place where businesses want to come and grow, Cafero said, adding that the General Assembly overcame its partisanship to work with the governor and pass legislation in the fall like the jobs bill.

"We're trying like crazy to promote a business-friendly environment, but this is a high-cost state," said Frantz, who served on the panel with Cafero, U.S. Rep. Jim Himes, D-4, Joseph Brennan, CBIA's senior vice president of public policy, and David Lewis, president of OperationsInc., a Stamford-based human resources outsourcing and consulting firm.

Frantz said it is difficult for Connecticut to compete for business when it is the only state to have legislation requiring that companies with more than 50 employees provide paid sick leave.

Confidence has a lot to do with improving the business climate, Brennan said.

"It's harder in Connecticut to get things done," he said, commenting that myriad state regulations are impeding companies' efforts to expand.

One of those in the audience, Bob Moore, chief executive officer and founder of Moore Physical Therapy & Fitness, based in Darien, said he was buoyed by Cafero's comments.

"We're constantly being stressed by taxes and increases in the cost of doing business," he said. "Governments should be run like a business -- setting a budget and following a budget."

Paul Seroka, president of the Seroka Group, a Greenwich-based marketing communications agency, said he is considering moving to Wyoming, South Dakota, Alaska, Nevada or Florida -- states with lower regulatory costs and no income taxes -- if Connecticut does not improve its business climate in five years.

Seroka relocated his business to Greenwich from White Plains, N.Y., in 1991 because Connecticut did not have a state income tax and the regulatory climate was more favorable.

Like Moore, Seroka said he was pleased to hear Cafero and Frantz say that there is a bipartisan effort in the General Assembly to promote business development.

Himes gave the audience a view of the economic situation from the national level, telling them that improvement in the housing market plays an important role in the fledgling recovery.

"Our GDP (gross domestic product) is 70 percent consumer purchases, and consumers are still very nervous. You've got millions under water in their mortgages. They aren't out there buying cars and washing machines," he said, commenting that the federal government should be more aggressive in promoting programs assisting home owners with their mortgages.

Himes said he will push for legislation to finance investment in infrastructure improvements, including the electrical grid, highways, bridges and railroads, but he is pessimistic about passage of such legislation.

"It's not likely to happen now, given the present environment in Washington," said Himes, who also is urging that community colleges provide programs that lead to filling job vacancies that employers say are unoccupied because they can't find qualified applicants.

He warned that extensive cuts in federal spending can damage the nation's economic recovery.

On the state level, Himes said he is bullish about the state's prospects, noting Malloy's aggressive stance in promoting business.

But Lewis is not as upbeat.

"I'm realistic. What doesn't kill you makes you stronger," he said, adding that government assistance is not enough to encourage businesses to hire and train workers. "People I talk to want less government, but more government when it comes to incentives like the (state) jobs bill."

Christopher Shays, former U.S. Representative and a candidate for the Republican nomination for the U.S. Senate, said following the event that state taxes have driven some of his friends from Connecticut, and legislation like the new paid sick leave bill is sending the wrong signal to out-of-state businesses who may be seeking a new home.

Shays said he has little hope that legislation will improve the nation's business climate. "There's total gridlock in Washington. It can't continue," Shays said. "I'm hoping that after the next election we'll see people act like grown-ups."