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Connecticut Leaves Businesses Vulnerable

BusinessAdvertisingExecutive BranchRick PerryQuinnipiac UniversityDannel Malloy

Texas Gov. Rick Perry made a splash by arriving in Connecticut on the wings of an advertising blitz declaring the Lone Star State "Open for Business." Perry wants Connecticut businesses to move to Texas. There's nothing new in governors alighting in other states to try to take home some businesses with them. All governors do it: It's their records of success that vary.

What made Perry's trip to Connecticut different is that businesses here have become so vulnerable to appeals from places that Connecticut leaders once thought they could safely hold in low regard. The Texas advertisement, for example, made an uplifting appeal with testimonies from Texans on medicine, technology and small businesses owned by women. The only trace of a twang came from Perry.

Texans have a reputation for the vivid. Other states have been more lethal to Connecticut's economy in a quiet way. In April, the Des Moines Register newspaper published a series of articles on the shift of insurance companies from Hartford to Iowa. It is a sobering account of decline and consequences. In the last two decades, the Hartford area lost nearly 18,000 insurance jobs.

The cost of doing business and the cost of living for employees are significantly less in Iowa and other Midwest locales. The differences in education and quality of life have diminished between here and there. Communication and technology have homogenized much of American culture. To those who continue to insist that state tax policies do not matter, take a look at the difference in the general insurance premium tax rates. Connecticut's is nearly twice Iowa's.

Mergers, especially those brought by the extended financial tumult of recent years, have brought some unwelcome change to Connecticut-based insurers.

Earlier this year, The Hartford announced it would be moving hundreds of jobs from Simsbury to Massachusetts. Pfizer, the pharmaceutical giant with facilities in southeastern Connecticut, has been eliminating jobs and transferring others to Cambridge, Mass. That's not a place that's been thought of as a threat to Connecticut jobs, but it is.

This is the drip, drip, drip of economic decline. It is reflected in the startling revised figures that show the state's economy contracted slightly in 2011 and 2012. It was the only state with an economy that did not grow last year. These numbers are not abstractions. A Quinnipiac University survey of 1,154 Connecticut voters last week found that 58 percent of them are unhappy with the state's economy, and especially with Gov. Dannel P. Malloy's 2011 tax increase.

The exodus of gun manufacturing jobs, long a staple of Connecticut's economy, has begun. Companies can be reluctant to be located in a place where they can make but not sell their products, as is now the case for some Connecticut gun manufacturers. This will come as a surprise to University of Connecticut economics professor Steven Lanza who, writing in the summer edition of The Connecticut Economy, found "no evidence that tougher gun laws send arms makers packing."

On Wednesday, a Myrtle Beach newspaper broke the news that PTR Industries, a Bristol gun manufacturer, is leaving Connecticut for South Carolina. A formal announcement by South Carolina Gov. Nikki Haley and others will take place Monday. The company will move 140 jobs from here to there. Gov. Perry hopes to entice others to move south.

The ordeal of change comes with opportunity for those who recognize and seize it. A rising tide of growth through trade, technology and political stability have allowed a billion people around the world to claim a place in the middle class.

This is good news for many reasons. One of them is particular to Connecticut. Among the first things the newly prosperous seek is improved medical care. Private medical insurance, disdained by many in America, is a prize to others who have been captives of appalling state medical health systems.

Two Hartford area companies, Aetna and CIGNA, are among the nation's behemoths in creating private health insurance networks. Around the world, there are new markets for their experience and talents. They will compete for customers in vast new markets. The narrower question will be whether the people they hire to help them prosper are based in Connecticut or places more hospitable to free enterprise.

Kevin Rennie is a lawyer and a former Republican state legislator. He can be reached at kfrennie@yahoo.com.

Copyright © 2014, The Baltimore Sun
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