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State’s ‘Triple E’ Agenda Moves Forward

September 1, 2012 By CBIA

Policymakers, regulators focus on environment, energy, economy

By Lesia Winiarskyj

CBIA Associate Counsel Eric Brown (far right) introduces DEEP Commissioner Dan Esty (far left) and EPA Region I Deputy Administrator Ira Leighton, keynote panelists at CBIA’s 2012 Environmental & Energy Conference.

Since taking the helm of Connecticut’s newly created Department of Energy and Environmental Protection (DEEP) last year, Commissioner Dan Esty has advanced what he refers to as “the triple E agenda: better environmental protection, movement to a cleaner, cheaper more reliable energy future, and a platform for economic growth, prosperity, and jobs success.”

Indeed, under Esty’s direction—and with considerable input from businesses—the agency has begun accelerating the permitting process, leaning its operations, and increasing its focus on assistance as an effective, efficient tool to maximize regulatory compliance.

Nicole Lugli, director of DEEP’s Office of Planning and Program Development, explains: “We met with small manufacturers and found out they couldn’t easily locate compliance assistance and guidance at DEEP. Many weren’t able to afford the tools and strategies to come into compliance. That was kind of an eye-opener for us,” she says.

“CBIA, our partner, was instrumental in the passage of legislation in 2011 requiring DEEP to develop a consulting services program to do on-site assistance.”

Rather than take punitive measures against small businesses for minor violations, which often pose little or no environmental risk but can trigger thousands of dollars in fines, DEEP’s compliance assistance programs give businesses the opportunity to identify and correct areas of noncompliance without significant penalties.

“We’re giving people an opportunity to come into compliance,” says Lugli. “We’re also improving web content and accessibility, making it user-friendly and interactive. Companies can subscribe to municipal and business newsletters on DEEP’s website and get updates and notices on new requirements and training.”

Over the next several months, DEEP will move forward on a wholesale overhaul of Connecticut’s environmental cleanup laws and regulations, with potentially significant implications for—and, CBIA hopes, significant input from—the regulated community.

“We’re optimistic that legislative and regulatory changes will result in an even more streamlined, efficient, and predictable system of environmental cleanup,” says Eric Brown, CBIA associate counsel specializing in environmental and energy issues.

‘21st Century Approach’

“We need a 21st century approach to environmental protection, to regulation, and to our energy strategies,” Commissioner Esty told business leaders at CBIA’s 2012 Environmental and Energy Conference.

More than 215 environmental health & safety professionals, engineers, project managers, consultants, and analysts attended the June program in Waterbury, which featured breakout sessions on environmental cleanup, management, and enforcement; a manufacturers’ roundtable; and sessions on clean, affordable energy.

“I think in Connecticut we have an opportunity to break new ground,” said Esty, “moving away from command-and-control regulations toward more focus on economic incentives, really trying to do things in a practical way, with common sense underpinning our choices, and doing things like rebuilding our remediaton program generally…getting brownfields back into productive economic use; doing things that are incentive-oriented, like changing the liability for off-site releases…[W]e are also trying to drive innovation…in terms of technology development, in terms of policy approaches, in terms of the financing for clean technology, clean energy. All of this we’re doing with a broad commitment to lighten the burden of regulation without lowering standards.”

Connecticut, in fact, already has some of the highest standards of environmental protection in the nation.

“We have run out in front of the rest of the country and want to be recognized for that as well as be given some flexibility,” said Esty, who acknowledged a “real spirit of partnership” between DEEP and the U.S. Environmental Protection Agency’s (EPA) Region I, which governs the six New England states.

The flexibility Esty refers to concerns EPA headquarters in Washington, D.C., however, which still tends to favor traditional command-and-control strategies rather than more innovative, market-based approaches.

“New England is unique,” agreed EPA Region I Deputy Administrator Ira Leighton, who joined Esty in a keynote discussion and manufacturers’ roundtable at the conference.” We’ve had a tradition that most of our agencies have developed regulations stronger and broader in scope than elsewhere in the nation.”

Leighton emphasized the need for federal agencies to “partner with states to maintain economic competitiveness…assuring environmental compliance while also advancing economic development.”

‘Window into the Future’

DEEP’s Dan Esty hears from business leaders about environmental and energy issues.

Energy policy—including strategies for diversifying the state’s fuel sources, establishing viable goals for renewable energy, and hardening the state’s energy infrastructure—was also a key topic at the conference.

Energy costs and policies are among the top three factors driving global manufacturing competitiveness, according to the 2010 Global Manufacturing Index developed by Deloitte and the U.S. Council on Competitiveness.

“On the energy side,” said Esty, “‘cleaner, cheaper, and more reliable’ is our mantra. The clean energy bank, LREC, ZREC…these are key pieces of our agenda. We’re dead serious about bringing down costs.

“We have a very nice window into the future, looking at what natural gas availability could do for Connecticut in the next 10–20 years. Shale gas is a game-changing element and part of [our] comprehensive energy strategy, [and] there will be programs to support this cheaper, cleaner fuel,” Esty said, pointing out that natural gas boasts a “two-thirds price differential over other types of fuel, thanks to the Marcellus Shale.”

The Marcellus Shale, a geologic formation covering several states, including much of Pennsylvania and New York, produces natural gas at levels that have surpassed industry projections. Because natural gas typically sets the price of electricity in New England’s wholesale market, better access to this cheaper resource would mean lower overall energy prices—including electric rates—for all end users in Connecticut. (Connecticut’s commercial and industrial electricity costs are the 10th highest in the U.S.)

“The question is, how do we take advantage of it? That’s a core question in our comprehensive energy strategy, and we will rely on the governor to help us answer it,” said Esty. “The problem in Connecticut is we have one of the lowest penetration rates for natural gas.” Expanding access, he noted, would “enormously benefit” residents and businesses.

‘On-the-Ground Results’

One year ago, two powerful storms—Irene and Alfred—knocked out power throughout much of the state, resulting in business disruptions, lost wages, and other hardships for Connecticut residents and employers.

Over the last 60 years, said Leighton, large storms have increased in New England more than in other parts of the country, leading to problems with infrastructure, insurance costs, public health, and “all sorts of other extraordinary challenges resulting from power loss and the inability to treat wastewater.”

Esty agreed, adding that the state must focus not only on cheaper and cleaner energy but also more reliable energy, which requires protecting and upgrading the state’s energy transmission and distribution systems.

“Our emphasis this year is delivering on-the-ground results. This year’s mission is execution. Getting the job done.” ■

Lesia Winiarskyj is a writer and editor at CBIA. She can be reached at lesia.winiarskyj@cbia.com.

Bright Prospects for Fuel Cell, Other Manufacturing in Connecticut

July 1, 2012 By CBIA

FuelCell Energy exec delivers keynote at Mfg4 conference in Hartford

Frank Wolak, vice president, government business, at Danbury-based FuelCell Energy addresses attendees at Mfg4 in Hartford on May 9.

Although FuelCell Energy’s Frank Wolak recognizes that Connecticut has seen a decline in manufacturing in recent decades, he prefers to look forward rather than backward. When he does, he likes what he sees—for his industry and Connecticut’s manufacturing sector overall.

“Among manufacturers in Connecticut that we interface with, there is renewed enthusiasm about the prospects for manufacturing in the state, provided that regulation and state policies don’t [drive up] the cost of doing business here,” says Wolak, who serves as vice president, government business, at FuelCell Energy. With its world headquarters in Danbury and manufacturing facility in Torrington, the firm employs more than 500 people.

“I think the Malloy administration is working hard to relieve some of [the burdens on business], as are members of the legislature,” adds Wolak. “I really think there’s a sense that Connecticut has an important place in the manufacturing spectrum and that we’ve got good, solid fundamentals here.”

“We Should All Be Proud”

On May 9, Wolak delivered the morning keynote address at Mfg4—Manufacturing for the Future, a national conference organized by the Society of Manufacturing Engineers. The three-day event drew thousands of OEMs and supply chain manufacturers to the Connecticut Convention Center. Sponsored by CBIA, Wolak’s address was heard by hundreds of conference participants.

He opened his remarks by reminding attendees that they should all be proud that they are “involved in making something.” Describing his father’s career as a manufacturer, Wolak recalled that every day “he came home from work proudly knowing that he helped contribute to making something,” adding that attendees “should take that same kind of pride as they go about learning about how to make things better or make something for the first time.”

Demand Will Drive Clean Energy Manufacturing

Wolak told Mfg4 participants that the outlook for clean energy manufacturing is positive, based on three factors:

  • Electricity demand is expected to increase dramatically (by 80%, according to an ExxonMobil report) by 2040
  •  The price of petroleum is expected to continue rising
  • Demand for clean energy, whether driven by government regulations or societal preference, will increase

“Ten years ago, the subject of renewable and clean energy was discussed in a few environmental, public policy, and utility circles,” said Wolak. “Today, green tech and clean tech are almost regular conversations in the media, local planning committees, universities, and national politics.”

Noting the emergence of new commercial energy generating technologies over the last 10 years—solar PV, wind turbines, and fuel cells—Wolak pointed out that all those new technologies share a common need.

“When they are ready for meaningful contribution to our electric energy resource base, they will have to be manufactured,” he said. “Not just in beta or pilot plants, but at scale with all the attendant quality, repeatability, and supply chain factors and, not to mention, at the lowest competitive cost.” ■

Bill DeRosa is editor of CBIA News. He can be reached at bill.derosa@cbia.com.

Connecticut’s ‘Triple E’ Agenda Moves Forward

June 21, 2012 By CBIA

Policymakers, regulators focus on environment, energy, economy

By Lesia Winiarskyj 

CBIA Associate Counsel Eric Brown (far right) introduces DEEP Commissioner Dan Esty (far left) and EPA Region I Deputy Administrator Ira Leighton, keynote panelists at CBIA’s 2012 Environmental & Energy Conference.

Since taking the helm of Connecticut’s newly created Department of Energy and Environmental Protection (DEEP) last year, Commissioner Dan Esty has advanced what he refers to as “the triple E agenda: better environmental protection, movement to a cleaner, cheaper more reliable energy future, and a platform for economic growth, prosperity, and jobs success.” 

Indeed, under Esty’s direction—and with considerable input from businesses—the agency is accelerating the permitting process, leaning its operations, and increasing its focus on assistance as an effective, efficient tool to maximize regulatory compliance. 

Nicole Lugli, director of DEEP’s Office of Planning and Program Development, explains: “We met with small manufacturers and found out they couldn’t easily locate compliance assistance and guidance at DEEP. Many weren’t able to afford the tools and strategies to come into compliance. That was kind of an eye-opener for us,” she says. 

“CBIA, our partner, was instrumental in the passage of legislation in 2011 requiring DEEP to develop a consulting services program to do onsite assistance.” 

Rather than take punitive measures against small businesses for minor violations, which often pose little or no environmental risk but can trigger thousands of dollars in fines, DEEP’s compliance assistance programs give businesses the opportunity to identify and correct areas of noncompliance without significant penalties. 

“We’re giving people an opportunity to come into compliance,” says Lugli. “We’re also improving web content and accessibility, making it user-friendly and interactive. Companies can subscribe to municipal and business newsletters on DEEP’s website and get updates and notices on new requirements and training.” 

Over the next several months, DEEP will move forward on a wholesale overhaul of Connecticut’s environmental cleanup laws and regulations, with potentially significant implications for—and, CBIA hopes, significant input from—the regulated community. 

“We’re optimistic that legislative and regulatory changes will result in an even more streamlined, efficient, and predictable system of environmental cleanup,” says Eric Brown, CBIA associate counsel specializing in environmental and energy issues. 

‘21st Century Approach’ 

DEEP’s Dan Esty hears from business leaders about environmental and energy issues.

“We need a 21st century approach to environmental protection, to regulation, and to our energy strategies,” Commissioner Esty told business leaders at CBIA’s 2012 Environmental and Energy Conference. 

More than 215 environmental health & safety professionals, engineers, project managers, consultants, and analysts attended the June program in Waterbury, which featured breakout sessions on environmental cleanup, management, and enforcement; a manufacturers’ roundtable; and sessions on clean, affordable energy. 

“I think in Connecticut we have an opportunity to break new ground,” said Esty, “moving away from command-and-control regulations toward more focus on economic incentives, really trying to do things in a practical way, with common sense underpinning our choices, and doing things like rebuilding our remediaton program generally…getting brownfields back into productive economic use; doing things that are incentive-oriented, like changing the liability for off-site releases…[W]e are also trying to drive innovation…in terms of technology development, in terms of policy approaches, in terms of the financing for clean technology, clean energy. All of this we’re doing with a broad commitment to lighten the burden of regulation without lowering standards.” 

Connecticut, in fact, already has some of the highest standards of environmental protection in the nation. 

“We have run out in front of the rest of the country and want to be recognized for that as well as be given some flexibility,” said Esty, who acknowledged a “real spirit of partnership” between DEEP and the U.S. Environmental Protection Agency’s (EPA) Region I, which governs the six New England states. 

The flexibility Esty refers to concerns EPA headquarters in Washington, D.C., however, which still tends to favor traditional command-and-control strategies rather than more innovative, market-based approaches. 

“New England is unique,” agreed EPA Region I Deputy Administrator Ira Leighton, who joined Esty in a keynote discussion and manufacturers’ roundtable at the conference.” We’ve had a tradition that most of our agencies have developed regulations stronger and broader in scope than elsewhere in the nation.” 

Leighton emphasized the need for federal agencies to “partner with states to maintain economic competitiveness…assuring environmental compliance while also advancing economic development.” 

‘Window into the Future’ 

Lon Solomita, environmental health, safety and sustainability (EHS&S) manager at Waterbury-based global chemical distributor Hubbard-Hall, Inc., asks the panelists a question.

Energy policy—including strategies for diversifying the state’s fuel sources, establishing viable goals for renewable energy, and hardening the state’s energy infrastructure—was also a key topic at the conference. 

Energy costs and policies are among the top three factors driving global manufacturing competitiveness, according to the 2010 Global Manufacturing Index developed by Deloitte and the U.S. Council on Competitiveness. 

“On the energy side,” said Esty, “‘cleaner, cheaper, and more reliable’ is our mantra. The clean energy bank, LREC, ZREC…these are key pieces of our agenda. We’re dead serious about bringing down costs. 

“We have a very nice window into the future, looking at what natural gas availability could do for Connecticut in the next 10-20 years. Shale gas is a game-changing element and part of [our] comprehensive energy strategy, [and] there will be programs to support this cheaper, cleaner fuel,” Esty said, pointing out that natural gas boasts a “two-thirds price differential over other types of fuel, thanks to the Marcellus Shale.” 

The Marcellus Shale, a geologic formation covering much of Pennsylvania, produces natural gas at levels that have surpassed industry projections. Because natural gas typically sets the price of electricity in New England’s wholesale market, better access to this cheaper resource would mean lower overall energy prices—including electric rates—for all end users in Connecticut. (Connecticut’s commercial and industrial electricity costs are the 10th highest in the U.S.) 

“The question is, how do we take advantage of it? That’s a core question in our comprehensive energy strategy, and we will rely on the governor to help us answer it,” said Esty. “The problem in Connecticut is we have one of the lowest penetration rates for natural gas.” Expanding access, he noted, would “enormously benefit” residents and businesses. 

‘On-the-Ground Results’ 

One year ago, two powerful storms—Irene and Alfred—knocked out power throughout much of the state, resulting in business disruptions, lost wages, and other hardships for Connecticut residents and employers. 

Over the last 60 years, said Leighton, large storms have increased in New England more than in other parts of the country, leading to problems with infrastructure, insurance costs, public health, and “all sorts of other extraordinary challenges resulting from power loss and the inability to treat wastewater.” 

Esty agreed, adding that the state must focus not only on cheaper and cleaner energy but also more reliable energy, which requires protecting and upgrading the state’s energy transmission and distribution systems. 

“Our emphasis this year is delivering on-the-ground results. This year’s mission is execution. Getting the job done.” 

Lesia Winiarskyj is a writer and editor at CBIA. She can be reached at lesia.winiarskyj@cbia.com.

GAIN Act Holds Promise for Jobs, Economy, Public Health

June 1, 2012 By CBIA

By Lesia Winiarskyj

Panelists (L-R) Steven Gilman, David Nicolau, Paul Kim, Barry Eisenstein, and Paul Pescatello discuss the need to incentivize the development of antibiotics at an April conference held at Yale University’s Woolsey Hall.

At an April conference organized and hosted by Connecticut United for Research Excellence (CURE) and the New England Biotech Association (NEBA) at Yale University, U.S. Sen. Richard Blumenthal (D-CT) discussed federal legislation aimed at combating “superbugs”—germs resistant to conventional drug therapies.

Designed to help biopharmaceutical companies develop effective drugs, the GAIN (Generating Antibiotic Incentives Now) Act spurs business innovation by streamlining the regulatory process.

Blumenthal, who co-sponsored the GAIN Act along with U.S. Sen. Bob Corker (R-TN), was one of seven speakers at Antibiotic R&D and Regulation in an Antibiotic Resistant World: The Promise of the Generating Antibiotic Incentives Now Act. The conference drew academics, investors, entrepreneurs, and science and medical professionals.

“A Profoundly Important Step”

Every year in the U.S., multi-drug-resistant pathogens such as MRSA claim over 100,000 lives and cost $21 billion–$34 billion. “[Superbugs] place a serious burden on our healthcare system,” said Barry Eisenstein, clinical professor of medicine at Harvard Medical School and senior VP of scientific affairs at Massachusetts-based Cubist Pharmaceuticals.

“The economic impact is profound,” said David Nicolau, director of Hartford Hospital’s Center for Anti-Infective Research and Development.

U.S. Sen. Richard Blumenthal (D-CT), co-sponsor of the GAIN Act, speaking at Yale.

Fortunately, Blumenthal noted, in an otherwise polarized political climate, the GAIN Act has secured strong support among House and Senate Democrats and Republicans. “Here is a step—a profoundly important step—in the right direction…a sign that things can get done if you reach across the aisle.”

The GAIN Act enjoys broad-based support from the American Medical Association, National Association of Children’s Hospitals, and more than 50 other groups.

The Trouble with Antibiotics

“There are two things you need,” said Thomas Steitz, to develop a class of antibiotics effective against resistant strains of bacteria. “One is a great idea and a great team. The other is money.” Steitz, a Yale University Sterling Professor of molecular biophysics and biochemistry and winner of the 2009 Nobel Prize for Chemistry, discussed the nature of drug resistance and efforts to combat it.

The challenge to developing effective antibiotics, he said, is that it has become prohibitively expensive—and unprofitable. “You can’t do it without having it make some economic sense.”

From the time they apply for a drug patent, biopharmaceutical companies have 15 years of patent protection. But, as Steven Gilman pointed out, bringing a new drug to market through clinical trials and FDA approvals takes somewhere between $800 million and $1.7 billion—and 10-13 years. By then, companies are left with less than five years of market protection for a product in which they’ve invested very heavily. Gilman, who addressed the economics of antibiotic R&D, is executive VP of R&D and chief scientific officer at Cubist Pharmaceuticals.

Incentives for Innovators

A core attribute of the GAIN Act is that it adds five years of patent protection for new antibiotics, giving drug developers more time to recapture their investment. This increase in exclusivity is fundamental, said Paul Kim, partner at the business law firm Foley Hoag LLC and a specialist in food and drug law.

Another key provision of the GAIN Act, said CURE President and CEO Paul Pescatello, is that it streamlines the regulatory process, requiring the FDA to grant priority review to new antibiotics and act on applications for approval within six months from the time of submission. The bill also makes it possible to designate antibiotics for the FDA Fast Track approval program. “Speeding the process,” Pescatello explained, “essentially adds patent life.”

A Boost for the Economy

The GAIN Act, Blumenthal pointed out, is significant not only for its public health value and its potential for bringing down healthcare costs, but also for its power to create good jobs in Connecticut.

Biopharma, said Pescatello, has a higher multiplier effect on the economy than any other industry, creating high-paying jobs that are not easily exported.

As of press time, the GAIN Act was included in a draft of the Food and Drug Administration Safety and Innovation Act, under review by the U.S. Senate Committee on Health, Education, Labor & Pensions. ■

Lesia Winiarskyj is a writer/editor at CBIA. She can be reached at lesia.winiarskyj@cbia.com.

GAIN Act Holds Promise for Jobs, Economy, Public Health

May 1, 2012 By CBIA

Proposed legislation offers incentives for new drug development

By Lesia Winiarskyj

Panelists, left to right, were Steven Gilman, David Nicolau, Paul Kim (moderator), Barry Eisenstein, and Paul Pescatello.

At an April conference organized and hosted by Connecticut United for Research Excellence (CURE) and the New England Biotech Association (NEBA) at Yale University’s Woolsey Hall, U.S. Senator Richard Blumenthal (D-CT) discussed federal legislation aimed at combating “superbugs”—germs resistant to conventional drug therapies.

Designed to help biopharmaceutical companies develop effective drugs, the GAIN (Generating Antibiotic Incentives Now) Act works much the same way as other legislation intended to spur business innovation: it streamlines the regulatory process and helps increase the commercial value of a product.

Blumenthal, who co-sponsored the GAIN Act along with U.S. Sen. Bob Corker (R-TN), was one of seven speakers at Antibiotic R&D and Regulation in an Antibiotic Resistant World: The Promise of the Generating Antibiotic Incentives Now Act. The conference drew dozens of academics, biotechnology investors and entrepreneurs, and science and medical professionals.

“A Profoundly Important Step”

Every year in the United States alone, multi-drug-resistant pathogens, such as MRSA, claim more than 100,000 lives and cost the U.S. between $21 billion and $34 billion.

“[Superbugs] place a serious burden on our healthcare system,” said Dr. Barry Eisenstein, clinical professor of medicine at Harvard Medical School and senior vice president of scientific affairs at Massachusetts-based Cubist Pharmaceuticals.

“The economic impact is profound,” said Dr. David Nicolau, director of Hartford Hospital’s Center for Anti-Infective Research and Development.

Fortunately, Blumenthal noted, in an otherwise polarized political climate, the GAIN Act has secured strong support among Democrats and Republicans in both the U.S. House and Senate.

“Here is a step—a profoundly important step—in the right direction…a sign that things can get done if you reach across the aisle.”

Indeed, besides solid bipartisan and bicameral support, the GAIN Act also enjoys broad-based coalition support from the American Medical Association, National Association of Children’s Hospitals, Pew Charitable Trusts, and more than 50 other organizations.

The Trouble with Antibiotics

“There are two things you need,” said Dr. Thomas A. Steitz, to develop a class of antibiotics effective against resistant strains of bacteria. “One is a great idea and a great team. The other is money.”

Steitz, a Yale University Sterling Professor of molecular biophysics and biochemistry and winner of the 2009 Nobel Prize for Chemistry, gave a detailed presentation on the nature of drug resistance and the promise of recent research and development to combat it.

The challenge to developing effective antibiotics, he said, is that it has become prohibitively expensive—and unprofitable.

“You can’t do it without having it make some economic sense.” 

From the time they apply for a drug patent, biopharmaceutical companies have 15 years of patent protection. But, as Dr. Steven Gilman pointed out, bringing a new drug to market through clinical trials and FDA approvals takes somewhere between $800 million and $1.7 billion—and 10-13 years. By then, companies are left with less than five years of market protection for a product in which they’ve invested very heavily.

Gilman, who addressed in detail the economics of antibiotic R&D, is executive vice president of research & development and chief scientific officer at Cubist Pharmaceuticals. He outlined what investors consider when evaluating a potential new drug and noted that price disparity and regulatory hurdles and uncertainty are key.

Steitz pointed out, too, that unlike drugs for chronic conditions (which typically require long-term use), the therapeutic use of antibiotics is for acute infections—making it even harder for drug developers to recoup their costs.

“The trouble with antibiotics,” he quipped, “is that they cure people.”

Incentives for Innovators

Sen. Richard Blumenthal (D-CT), co-sponsor of the GAIN Act, speaking at Yale.

“Innovation is the way out of the healthcare crisis,” said CURE President and CEO Dr. Paul Pescatello.

Because of the considerable financial and regulatory hurdles, however, new antibiotics are being added with relatively low frequency.

“This is incredibly problematic,” said Nicolau. “We need new tools…The organisms are in fact moving ahead without us.”

The GAIN Act and its “clear and impactful policies,” said Eisenstein, “offer our best hope.”

A core attribute of the proposed legislation is that it adds five years of patent protection for new antibiotics, encouraging manufacturers to invest in antibiotic R&D by giving drug developers more time to recapture their investment.

This increase in exclusivity for innovators is fundamental, said Paul Kim, partner at the business law firm Foley Hoag LLC. Kim, who specializes in food and drug law, moderated the panel discussion.

Another key provision of the GAIN Act, said Pescatello, is that it streamlines the regulatory process, requiring the FDA to grant priority review to new antibiotics and act on applications for approval within six months from the time of submission. The bill also makes it possible to designate antibiotics for the FDA Fast Track approval program.

“Speeding the process,” Pescatello explained, “essentially adds patent life.”

A Boost for the Economy

The GAIN Act, Blumenthal pointed out, is significant not only for its public health value and its potential for bringing down healthcare costs, but also for its power to create good jobs in Connecticut.

Biopharma, said Pescatello, has a higher multiplier effect on the economy than any other industry, creating high-paying jobs that are not easily exported.

As of press time, the GAIN Act was included in a draft of the Food and Drug Administration Safety and Innovation Act, under review by the U.S. Senate Committee on Health, Education, Labor & Pensions.

Lesia Winiarskyj is a writer and editor at CBIA. She can be reached at lesia.winiarskyj@cbia.com.

Jobs, Education Reform Among Top Issues at Connecticut Business Day

April 1, 2012 By CBIA

Connecticut Senate Republican Leader John McKinney (R-Fairfield) disucsses the state budget at Connecticut Business Day at the Legislative Office Building in Hartford

Business leaders, policymakers exchange ideas for moving forward

By Dave Conrad & Bill DeRosa

On Feb. 29, 300 Connecticut business leaders came together at the Legislative Office Building in Hartford for Connecticut Business Day. Their message to policymakers? “Help us stay in Connecticut and create jobs.”
The response by speakers Lt. Governor Nancy Wyman, Senate Republican Leader John McKinney (R-Fairfield), and Department of Economic and Community Development Commissioner Catherine Smith was, in effect, “We’re working on it.”

Co-sponsored by the Connecticut Association of Chamber of Commerce Executives and CBIA, Business Day focused on several topics, including jobs, education reform, business costs, and fiscal issues. Audience members and policymakers exchanged ideas on how to move ahead from last October’s special legislative session on jobs to make even more progress this year.

Everything that happens this year, said Lt. Gov. Wyman, starts with the bipartisan package of jobs programs and incentives lawmakers passed last fall. Referring to the special session as “a miracle [that] happened in October,” she said the rare across-the-aisle accomplishment was an important effort to tangibly demonstrate that Connecticut “cares about businesses.”

Fixing Education

Since the passage of the jobs bill, the administration has turned much of its attention to another concern of businesses—declining school and student performance and the lack of well-educated, skilled workers in the state. “We have heard from businesses that they can’t find enough people who fit into the positions they have,” said Lt. Gov. Wyman.”

In response, Gov. Malloy has proposed broad education reforms (contained in Senate Bill 24) now under consideration by the legislature.

“SB 24 is really important to every parent and every business in this state,” said Business Day attendee Kris Lorch, president of Alloy Engineering Co. in Bridgeport. “Those are our future workers.”

The bill contains provisions for expanding preschool education, helping teachers and administrators become better at their professions, turning around poorly performing schools and school systems, and modernizing and revitalizing Connecticut’s technical schools. Among its goals are improving student performance and closing Connecticut’s wide achievement gap between students from low-income families and their more affluent peers.

“Poverty is not an excuse for poor student performance,” said CBIA’s president and CEO John Rathgeber, urging the Business Day audience to support SB 24.

He added that reforming public education is imperative to securing Connecticut’s future and providing young people with the opportunity to have productive lives and lead our economy.

“This issue will not move forward without your involvement,” he said. “If you do one thing this session, tell your legislators that we need to spend education dollars more wisely and, most of all, improve student performance.”

Connecting Education and Industry

Dave Anderson, plant manager at BD Medical, a division of Becton Dickinson and Co. in Canaan, plans to do just that. “From my perspective as a manufacturer, I want to know that

Dr. Fred McKinney, president of the Greater New England Minority Supplier Development Council, introduces Catherine Smith, commissioner of the state Department of Economic and Community Development.

 we’re creating a broad base of future employees, that we have people who are interested in working in a manufacturing facility in Connecticut,” he said. “The skills gaps that we talk about are interest and proficiency in math and the sciences. We need to see as much effort to create knowledge and capability in those areas as we do in reading and social studies.”

Business Day participant Jack Traver, Jr., president of electrical apparatus and service supplier Traver IDC in Waterbury, has been working with Naugatuck Valley Community College to help ensure that the curriculum and the equipment the students work on aligns with industry needs. Traver would like to see the state’s community colleges and vo-tech high schools more closely connect their curricula so that students receive a solid grounding in basic mechanical skills as well as in more advanced areas like lean and computer-aided design and drafting (CADD).

“To some extent,” said Traver, “the kids in the vo-tech schools are getting good basic mechanical skills—machining, lathes, milling, etc.—but some of the advanced manufacturing curricula at the community college level tended to concentrate more on skills like lean or CADD before students were finished learning the mechanical skills. Now it seems like more work is being done to bridge the tech programs at the high schools and the curricula at the community colleges.”

The Fiscal Factor

Legislative Republicans are backing the governor’s education priorities, said Senate Republican Leader John McKinney. “Education reform is something we must do and must do together,” he said, noting that the governor has reached out to GOP lawmakers for support. “We all agree that…it’s not fair that our kids are in failing schools.”

But Republican lawmakers are also very concerned about the additional spending called for in the governor’s revised budget in a year that’s already seeing red.

“We should not spend one dollar more than we’ve budgeted,” said McKinney. Instead, policymakers should reduce spending in other areas to meet the $321 million in additional spending in the proposed budget revision.

The View from the DECD

“I consider everyone in this room my customer,” said DECD Commissioner Catherine Smith to Business Day attendees. After 20 years of no job growth in the state, she said the Malloy administration’s aggressive approach to listening to businesses throughout last year helped produce the successful jobs bill.

Smith said the 9,000 jobs created in Connecticut in 2011 “is a small puff of wind in our sails,” and she aims to “double or triple” that growth in the next few years.

Helping small businesses grow, improving the state’s regulatory climate, reducing business costs, and creating a “second-to-none” workforce are major priorities of her agency and the administration.

Introducing Commissioner Smith was Dr. Fred McKinney, president of the Greater New England Minority Supplier Development Council. He said that “understanding how laws impact all businesses in the state” is an integral part of Connecticut’s recovery. “The demographic reality is changing,” he added, so he appreciated the DECD’s outreach to make sure the state is “available and open to all businesses.”

Takeaways

DECD Commissioner Catherine Smith confers with two Business Day attendees following her address.

“Some [policymakers] get it, and some still don’t,” said Business Day attendee Jamison Scott, vice president of Air Handling Systems in Woodbridge. “I think that’s a real challenge, and that’s why we’re here as business owners today, to help those who don’t get it to understand how critical business is to the state’s economy. When you have people standing up here saying they’re considering leaving the state because of the high costs, there are still major challenges to overcome.”

The business community, said Scott, needs to make sure our elected officials know that we’re looking at what they’re doing. “We don’t just elect them and walk away. We have to hold them accountable so we can encourage business growth and economic growth. When that happens, we’ll have more tax revenue to make improvements in areas like education.”

Jack Traver came away from Business Day with a sense of cautious optimism. “In general, it seems like there’s more of a spirit of cooperation among the different parties, the legislature, and the executive branch,” he said. “Everybody seems to be more focused on important issues like education reform. There seems to be mutual agreement on that, just as there was some bipartisan support for the jobs bill last October.” ■

Dave Conrad, a writer/editor at CBIA, can be reached at dave.conrad@cbia.com. Bill DeRosa is editor of CBIA News and can be reached at bill.derosa@cbia.com.

Panel: State Must Keep Making Progress

March 1, 2012 By CBIA

CBIA Board Member David Lewis, president & CEO of Stamford-based HR consulting firm OperationsInc, at the Business & Politics Forum in Norwalk. The event was sponsored by CBIA and the CEO Roundtable.

On Jan. 31, a panel of government and business leaders told 70 businesspeople at the Norwalk Inn and Conference Center that the state needs to go beyond the jobs bill passed in October and continue improving Connecticut’s prospects for economic growth and job creation.

Sponsored by CBIA and the CEO Roundtable, the Business & Politics Forum featured five panelists: U.S. Rep. Jim Himes (D-CT 4), House Republican Leader Lawrence Cafero, Jr. (R-Norwalk), State Sen. L. Scott Frantz (R-Greenwich), CBIA Senior Vice President of Public Policy Joe Brennan, and David Lewis, CEO of Stamford-based HR consulting firm OperationsInc.

Although the jobs bill has begun to pay dividends, many of the panelists and audience members felt that the state must do more to move the economy forward, in particular by resolving its fiscal issues, reducing business costs, and improving the tax and regulatory environment.

“You have to ease up on the regulations,” Lewis told CBIA News. “You have to say ‘yes’ more than ‘no,’ and you have to not put people through the wringer when it comes to filling out paperwork.”

Lewis says that those factors have contributed to Connecticut’s poor showing in rankings of states’ business-friendliness. But he believes that putting the onus solely on the state for turning things around is not fair, especially in the current economic climate.

“If the federal government is really serious about getting the unemployed in this country back to work, they need to do something really radical.”

What would that be? Lewis suggests that the feds forgive the payroll taxes for a new hire for two years if a company hires someone who is unemployed and keeps that person engaged for two years.

“Small businesses would take that seriously,” he says. ■

Economy Slowly Strengthening, Say Summit Presenters

February 1, 2012 By CBIA

But international issues and fiscal challenges threaten fragile recovery

By Dave Conrad & Bill DeRosa

On Jan. 6, 560 business leaders gathered at the Marriott Hartford Downtown for the annual Economic Summit and Outlook, hosted by CBIA and the MetroHartford Alliance and sponsored by Webster Bank. That same day the nation’s unemployment rate dropped to 8.6%—the lowest in nearly three years.

Keynote speaker Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston, called that good news, noting that the country’s GDP is also improving and that inflation should stay low. He cautioned, however, that the labor market is still weak and that escalating tension with Iran and its possible impact on oil markets, the European Community’s financial troubles, and the possibility of “excessive fiscal austerity here and abroad” are lurking as major downside risks.

Rosengren was joined at the Summit by speakers Susan Herbst, president of UConn; Nick Perna, economic advisor to Webster Bank; Benjamin Barnes, secretary of Connecticut’s Office of Policy and Management; and Rep. Craig Miner (R-Litchfield), ranking member of the legislature’s Appropriations Committee. Barnes and Miner spoke on a panel with moderator Keith Phaneuf, State Capitol reporter for The Connecticut Mirror.

Eric Rosengren, president and CEO of the Federal Reserve Bank of Boston, addresses the crowd at the Economic Summit & Outlook last month at the Marriott Hartford Downtown. The event, which drew 560 business leaders from across Connecticut, was hosted by CBIA and the MetroHartford Alliance and sponsored by Webster Bank.

National & State Jobs Outlook

Despite the drop in unemployment, Rosengren noted that small businesses are still not hiring and have been “severely hampered by the decline in house values and the tightening of credit standards.

“We’re just not seeing the creation of new businesses,” he said, pointing out that employment and business growth nationally have been mainly in midsize and larger companies, where credit has been more available.

Overall, said Rosengren, the jobs recovery has been very slow, with the U.S. still far away from its previous peak employment, and the longer our unemployment rate stays high, the harder it will be to get back to pre-recession levels of 5%–6%. He told the audience that he expects the Federal Reserve to continue promoting growth and encouraging employment, looking for ways to target improvements in housing and small business especially.

Perna explained that Connecticut’s rate of jobs recovery has been about the same as the nation’s—both getting back about 30% of the jobs lost in the recession—but that our state’s recent jobs growth has been about half that of the U.S. rate of 1%.

Nevertheless, Perna noted, Connecticut’s GDP growth has kept up with the nation’s, largely because of our state’s higher per-worker productivity. He said that Connecticut’s productivity has historically outpaced the nation’s and will continue to do so.

“In the last five years, Connecticut’s per-worker GDP grew 2.5% annually versus 1.5% nationally, putting us near the top of all states,” said Perna. “Looking ahead, about two-thirds of the state’s overall economic growth will come from productivity and one-third from jobs.”

Perna agreed with Rosengren when it comes to international threats, arguing that Connecticut’s economic health, like the nation’s, is very sensitive to global economic developments—particularly in Europe, because of our state’s strong trade ties to that part of the world.

The Research Connection

If UConn President Susan Herbst has anything to say about it, Connecticut’s economic health will be getting a big boost from the state’s flagship university. She described plans for bringing together “world-class scholars and researchers with men and women who are creating startup businesses,” adding that UConn is already home to 22 incubating companies and has a “strong pipeline of additional requests.”

UConn’s ramped-up role as an economic driver centers on two major programs that have received financial backing from the Malloy administration and the General Assembly: a new technology park in Storrs and the Bioscience Connecticut initiative at the UConn Health Center in Farmington.

UConn President Susan Herbst describes the university’s new role in the state’s economic development.

The tech park, said Herbst, “is designed to spark the development and commercialization of new ideas for manufacturing and advanced product development in the aerospace, defense, biotechnology, and energy industries.”

Its anchor facility—slated for completion in 2015—will be built on a 300-acre parcel on the UConn campus and provide large, flexible-use laboratories with highly specialized equipment to top academic researchers and industry scientists. It is expected to generate hundreds of jobs during design and construction and many more going forward.

The Bioscience Connecticut initiative will leverage the UConn Health Center “to advance our state’s economic and healthcare goals by making Connecticut a leader in bioscience,” Herbst explained.

The project includes increasing the enrollment in the Health Center’s medical and dental schools, upgrading its patient care facilities, and increasing its research innovation capacity through upgrades to the existing research facility and doubling the amount of incubator space for small-business startups in the bioscience field.

Herbst noted that the Bioscience Connecticut initiative is already paying off, referring to the state’s investment in bringing The Jackson Laboratory to the Health Center campus. The deal struck with the global genetics research firm includes a commitment by the company to create 300 jobs over ten years.

The Fiscal Factor

Attracting more high-growth companies like The Jackson Laboratory will depend in part on the state’s ability to address the fiscal problems that have long contributed to its high-cost, business-unfriendly reputation.

State budget director Benjamin Barnes told the Summit audience that the Malloy administration is committed to solving those problems and has set the state “on a course to deal with its unfunded and underfunded pensions, the debt in the state’s unemployment compensation fund, and the move to GAAP accounting.” The way to do that, he said, is to have “positive financial results and then apply excess revenues to the long-term gaps over time.”

Questions persist, however, about whether the state will achieve all of its targeted budget savings in order to balance this year’s budget, including $160 million from cost-saving actions and suggestions by state employees.

Barnes’ fellow panelist Rep. Craig Miner argued that the state’s recent borrowing from bond funds to pay operating costs “should set off alarms” and that while the state continues to await cost-saving ideas from state employees, “money continues to go out the door, and we’re having to borrow to pay our bills.”

Barnes, who is confident that the state will hit its savings targets, countered by saying that temporarily using bonds proceeds to pay operating expenses is “perfectly appropriate” and that if the state had been using GAAP over the past decade, there would have been enough cash on hand. ■

Dave Conrad, a writer/editor at CBIA, can be reached at dave.conrad@cbia.com. Bill DeRosa is editor of CBIA News and can be reached at bill.derosa@cbia.com.

CBIA’s 2012 Government Affairs Program

January 1, 2012 By CBIA

Moving beyond the jobs session

Last October’s special legislative session showed what can be accomplished when an entire state focuses on jobs: positive, bipartisan action and progress toward rebuilding confidence in Connecticut. The key is what happens next.

To be a leader in the global economy, our state must become more competitive every day. A vibrant private-sector economy is the surest way to reach that goal.

Reinventing Connecticut starts with reclaiming our heritage of innovation, ingenuity, and entrepreneurship, understanding that:

  • Our strengths far outweigh our challenges
  • Our employers are among the best in the country
  • Our businesses and government can work better together
  • Our business costs are a barrier to job creation

In CBIA’s 2012 Government Affairs Program, our members outline dozens of specific action steps Connecticut policymakers can take to build a stronger business climate. Those steps fall into four broad categories:

  • Improve fiscal policy and reduce business costs
  • Invest in our future
  • Modernize infrastructures
  • Cut red tape

The following contains examples of recommendations from our 2012 Government Affairs Program.

Improve Fiscal Policy; Reduce Business Costs

The most important step toward reducing the cost of doing business in Connecticut is to keep the size and cost of state government within taxpayers’ means. That can be accomplished by making government more efficient, controlling the growth of spending, and leveraging state tax policy to help drive our economy. CBIA recommends action be taken in six major public policy areas:

  1. State spending: Control spending by streamlining state government and budgeting responsibly. Steps include keeping the state budget under the constitutional spending cap and adopting the recommendations of the Connecticut Regional Institute for the 21st Century in areas such as long-term care, corrections, and government retiree benefits.
  2. State taxes: Promote tax policy that encourages business investment, jobs, innovation, and productivity—for example, by eliminating the 70% cap on corporate income tax credits and allowing all business entities to claim and/or pass through tax credits.
  3. Labor and employment: Promote job creation by reducing business costs and administrative burdens, and close the gap between state and federal laws. Specific action steps include controlling workers’ compensation costs by curbing unfair practices, such as price gouging related to wholesale medications.
  4. Healthcare: Reduce costs, increase access, and improve quality through Connecticut’s private-sector healthcare industry by, for example, continuing to develop Connecticut’s federally mandated health insurance exchange in a way that works with our private-sector healthcare system to reduce the number of people without insurance.
  5. Energy: Promote economic growth by making energy costs more competitive while improving reliability and fostering efficiency, conservation, and technology innovation. Steps toward achieving those objectives include restructuring Connecticut’s Renewable Portfolio Standards so that its primary function of promoting innovation, jobs, and energy security better align with the goal of accessing clean and affordable energy.
  6. Environment: Continue making reforms that enable our economy to grow while safeguarding our resources. For example, the Department of Energy and Environmental Protection should work with the U.S. Environmental Protection Agency (EPA) to develop a system in which Connecticut and other states with exemplary environmental performance are given the flexibility to conduct, or authorize through private entities, “compliance assistance visits” to regulated entities that would be considered “inspections” to satisfy EPA mandates.

Invest in Our Future (Education & Training)

Connecticut’s future depends on our ability to provide all young people with the education they need to be productive citizens and contributors to the state’s economic competitiveness.

Our economy’s most important strategic asset is the skill, innovation, and productivity of Connecticut’s workforce. Today’s increasingly competitive global economy demands that we raise the academic performance of all students and close the achievement gap that separates low-income and minority students from their peers. Our state and local governments spend a great deal on public education, and it’s critical that those resources are used to create effective learning environments.

To achieve that goal, CBIA urges state policymakers to embark on a program of education reform that includes the following major objectives:

  1. Increase accountability: Evaluation processes and employment practices should be modified to help administrators and teachers enhance their skills, identify training opportunities, and improve student performance. Steps include empowering boards of education, strengthening performance evaluations for administrators and teachers, and awarding tenure to teachers only after four consecutive years of an “effective” performance rating.
  2. Turn around failing schools: Unlike other states, Connecticut lacks a systematic approach for addressing schools that consistently fail to improve student performance. As a result, we have about 120 schools that for more than five years have failed to make progress under federal guidelines. CBIA recommends that the state take several actions, including creating within the Department of Education a “school turnaround office” to facilitate rapid, effective intervention in failing schools and give the commissioner additional powers to intervene in the lowest-achieving 5% of schools.
  3. Encourage transparency: Connecticut and its municipalities are national leaders in supporting public education as measured by per-pupil expenditures. However, tracking how the money is spent and measuring its effectiveness is difficult. Solutions include adopting a common chart of accounts across the state to show where education dollars are being spent and how much funding is dedicated directly to classroom learning.
  4. Promote technical high schools and community colleges: Connecticut’s technical high schools and community colleges can play an even more significant role in closing the gap between employment skills and job opportunities. Among other things, Connecticut should follow the lead of other states and adopt a uniform, nationally recognized skills certification approach that allows students to obtain industry-driven credentials through high school, college, and beyond.

Modernize Infrastructures

Recognizing the importance of modern, efficient transportation and energy infrastructures to Connecticut’s economic future, CBIA recommends the following:

  1. Transportation: Modernize Connecticut’s infrastructure through strategic, prioritized investments. Steps include working with the new Connecticut Airport Authority and other stakeholders to develop a comprehensive, integrated plan for the state’s airports.
  2. Energy: Promote economic growth by improving reliability, reducing energy costs, and adopting new resources and technologies. Policymakers should, for example, work with electricity utilities, manufacturers, and the general business community to develop ways to improve Connecticut’s energy infrastructure and ensure reliability even in times of severe strain to the system.

Cut Red Tape

Practicing consistency, certainty, and fairness in government regulation of businesses will increase employer confidence and the potential for a revitalized economy. Therefore, CBIA urges policymakers to reform regulatory policies through a number of actions, including:

  • Improving the process for developing, adopting, and implementing state regulations to, among other things, promote predictability and reduce uncertainty
  • Requiring “guidance” and “policy statements” from state agencies to be clearly identified as such, refer to the underlying statutes or regulations they seek to clarify, and be compiled and readily accessible to the regulated community
  • Requiring an analysis of how proposed state regulations differ from similar federal standards and explaining why additional stringency is needed ■

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.

Highway Robbery

December 1, 2011 By CBIA

The high cost of traffic congestion in Connecticut

Traffic congestion costs nearly 48 million hours in delays and $971 million in lost time and wasted fuel in Connecticut’s three largest urban areas: Hartford, New Haven, and Bridgeport-Stamford. That’s according to the 2011 Urban Mobility Report published by the Texas Transportation Institute.

Not surprisingly, Bridgeport-Stamford has the worst traffic congestion, accounting for nearly half of the delay hours and lost dollars among the three urban areas. A 22-mile stretch of I-95 in the Bridgeport-Stamford area is actually rated the seventh-worst commute in the country according to The Daily Beast’s “America’s 50 Worst Commutes” for 2011.

Feasible Solutions

How to unclog the transportation arteries? “The answer, typically, is get the drivers off the roads and onto the rails, which makes sense but is very expensive,” says Sen. L. Scott Frantz (R-Greenwich), whose district lies at the epicenter of Connecticut’s most traffic-snarled region. “Our capacity for more seats on trains has not gone up by much despite the fact that hundreds of millions of dollars have been invested in the new rail cars. Both New York and Connecticut will have a tough time affording much in the way of increases in capacity on Metro-North.”

Frantz suggests focusing on “some of the easier and more affordable fixes for improving throughput on I-95,” including:

  • Improving on- and off-ramps to eliminate traffic slowdowns
  • Instituting green light, righthand-turn-only requirements at the end of busy off-ramps during the morning rush hour
  • Rerouting traffic during the afternoon rush hour before cars get onto I-95
  • Preparing drivers better for sections of the highway where sun glare is a problem
  • Rerouting the traffic flow at major merge points (Rt. 7 and I-95, for example)
  • Educating motorists better about carpooling, mass transit, and times to avoid traveling on I-95

Trucks: Timing Is Everything

According to a 2011 draft report by the state’s now-defunct Transportation Strategy Board, trucks comprise 10–15% of the vehicles on Connecticut’s main interstates, adding significantly to congestion.

A solution, says Michael J. Riley, president of the Motor Transport Association of Connecticut Inc., would involve altering the time of day shipments are made.

Typically, says Riley, trucks carrying freight arrive at businesses in the morning, at the same time employees are coming in.

“New York invited trucks to come into New York City over the nighttime hours,” he says. “The truckers liked it, because they didn’t have the traffic to deal with. They got in, they got out. So there is capacity on our interstate highway system, but it’s between 10 pm and 5 am.”

Riley points out that such a plan would have to be a regional effort, not just something that one or two companies do. “If you’re a manufacturer out in Granby asking for your stuff to be delivered at 3 am, it’s not convenient for a trucking company to go up there for just one [delivery].” ■

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