CT20×17 campaign aims to restore Connecticut’s economic competitiveness
By Bill DeRosa
When asked in a recent Quinnipiac University poll what policymakers’ top priority should be, 36% of voters said jobs and the economy. (Taxes were next at 14%.)
Business leaders expressed a similar sentiment in the CBIA/BlumShapiro 2014 Survey of Connecticut Businesses, with 35% reporting that the state’s economy is their single greatest concern.
Existing Strengths Not Enough
This widespread concern about Connecticut’s economy is not misplaced. Ours has been one of the slowest-growing economies in the nation since 2008, shrinking by 2.6% from 2008 to 2012, according to a Bloomberg “Best (and Worst)” comparison of state GDP growth. That performance made Connecticut one of only 10 states showing negative growth during that period.
In 2013, the state managed to reverse the negative trend, with GDP growth of 0.9% for the year and 2.8% in the fourth quarter.
That’s good news, says Pete Gioia, CBIA vice president and economist, though he cautions that we still have a long way to go to get back to pre-recession GDP levels.
“Given the state’s weak growth in recent years, it’s encouraging that Connecticut outperformed the rest of New England in the fourth quarter of last year,” says Gioia, “but we need to continue on that trajectory for our recovery to catch up with the rest of country.”
In getting there, it helps that Connecticut has significant competitive strengths, including one of the most highly productive workforces in the world, a vibrant network of innovative companies, ready access to capital, the highest level of R&D per capita in the country, and an enviable quality of life.
Those strengths alone, however, have not been enough to keep Connecticut competitive with other states in attracting private-sector investment and maintaining business confidence—key catalysts for economic growth.
Connecticut’s most troubling competitive disadvantages include high business costs, a deteriorating transportation infrastructure, and serious ongoing fiscal problems.
CT20×17 Aims to Change the Equation
Earlier this year, CBIA and dozens of other business, professional, and community groups launched CT20×17, a multiyear campaign designed to build on Connecticut’s strengths, turn around its competitive disadvantage, and move the state into the top 20 states in all major national business climate and economic competitiveness rankings by 2017.
These rankings—which include CNBC’s America’s Top States for Business, Forbes’ Best States for Business, Chief Executive magazine’s Best & Worst States for Business, and the Small Business and Entrepreneurship Council’s Small Business Policy Index—are barometers for how Connecticut is performing compared with our competitor states. They serve as benchmarks for the CT20×17 campaign.
Although the media outlets and think tanks that rank the states employ somewhat different metrics to come up with their results, Connecticut has typically not done well.
CNBC’s highly publicized America’s Top States for Business, for example, ranked Connecticut 46th this year, a drop of one place from last year and 15 places since 2007. The state’s poor rating this year stems in part from having the fourth-highest cost of doing business, third-highest cost of living, and the nation’s second-worst economy.
In CNBC’s heavily weighted economy category—based on economic growth, job creation, the state’s fiscal health, and other factors—Connecticut fell precipitously, from 39th in 2013 to 49th in 2014. The state also fell four places—from 43rd to 47th—in the cost-of-doing-business category, which hinges on factors such as state and local tax burdens, energy costs, and wages, and is also heavily weighted by CNBC.
The categories in which Connecticut improved since last year—infrastructure and transportation (49th place to 42nd), workforce (37th to 32nd), quality of life (17th to 14th), and business friendliness* (26th to 24th) were not weighted heavily enough to keep the state from slipping overall.
Why are business climate rankings important? Although they are intended to reflect economic and public policy realities, they can also become a self-fulfilling prophecy. By creating the perception that a state is a difficult place to do business, they diminish that state’s ability to attract private-sector investment.
“Whether or not the national rankings are entirely accurate,” says CBIA President and CEO John Rathgeber, “the perception of Connecticut as a tough place to do business discourages new investment and makes it challenging to keep companies here.”
Tony Rescigno agrees. Rescigno is president of the Greater New Haven Chamber of Commerce, a CT20×17 partner organization.
“National rankings are critical,” he says. “Outsiders view them as accurate, so if they are not positive, it impacts businesses’ decisions to relocate or expand their operations here.”
More than one in five respondents to the 2014 Survey of Connecticut Businesses indicated that their company is considering moving or shifting significant production to another state within the next five years, and 29% are considering expanding somewhere else over that same period.
Being ranked near the bottom as a place to do business is unacceptable, says Kim Sirois Pita, founder of marketing consultants Kim Pita Peaces in Rocky Hill and a member of the CT20×17 steering committee. She believes that residents and policymakers can no longer afford to accept the state’s declining status as a business location, a decline she finds frustrating and disheartening.
“I love this state and believe in this state, but we keep seeing these negative rankings and the negative perceptions they create, and it feels like a losing battle.”
‘It’s About Life’
Pita points out that a competitive business climate doesn’t just help businesses thrive; it’s essential for a robust economy, job growth, and sustaining a high quality of life—factors that impact every community, every neighborhood, and every family in Connecticut.
“I don’t think there’s anything more important than this, because it affects everything,” she says. “If we don’t have businesses that want to stay or locate in Connecticut, what’s this going to leave us with? Without a thriving private sector, we won’t be able to sustain our quality of life. So this is not just about business; it’s about life.”
Which is why, Pita says, CT20×17 has been able to attract a diverse group of partner organizations, including the Connecticut Hospital Association, led by President and CEO Jennifer Jackson.
“Connecticut hospitals are focused on the future—providing excellent care that everyone can afford and access,” she says. “[Our] hospitals employ more than 55,000 people and generate an additional 55,000 jobs in our communities. They serve as a magnet for other business and commerce. That’s why we’re proud to be part of CT20×17.”
Jackson would like to see the cost of doing business in the state reduced by eliminating the hospital tax (instituted in 2011 to help close a multibillion-dollar budget deficit) in order to make healthcare more affordable. Because of the tax, she says, businesses and individuals in Connecticut are paying more than they need to.
“We are part of CT20×17 to foster a vibrant economy that will enable us to continue to provide world-class, affordable care to Connecticut residents well into the future”
Donna Galluzzo, president and CEO of HMS Healthcare Management Solutions Inc. in Wallingford, praises the campaign for its potential to promote collaboration among entities that may have philosophical or political differences.
By focusing the debate on a common goal, she says, “bringing together leaders from government, business, and the community to drive state policies that can move Connecticut into the top 20 states for business, CT20×17 gives us the opportunity to work together to build a brighter future that is fueled by more jobs and economic prosperity.” [Read More...]