An annual survey of Connecticut businesses revealed “cautious optimism” among the respondents. At least 35 percent of companies said they were growing, while 54 percent reported they were “holding steady.”
The Connecticut Business and Industry Association and BlumShapiro’s survey of 460 businesses was released Friday morning at the Connecticut Economy Conference in Rocky Hill.
“I think overall what the survey is showing is that Connecticut is continuing and recovering,” Peter Gioia, an economist with the Connecticut Business and Industry Association, said. “We’ve had some pretty good job figures so far this year and the companies are also making some investments.”
The survey found that “we have a 3-to-1 ratio of companies in the state of Connecticut which are growing to the companies that are contracting,” Joseph Kask, a managing partner at BlumShapiro, said.
But the good news is even better when you consider that over the past year, 46 percent of Connecticut businesses surveyed added a new product or service, and 47 percent expect to do so in the next year.
However, that’s not to say there aren’t still challenges. The single biggest challenge cited by Connecticut businesses remains the Connecticut economy. Thirty-four percent of respondents cited the state’s economy as their biggest challenge. It’s a number that hasn’t changed since last year’s survey.
Another 18 percent of businesses cited the national economy as the biggest challenge while 16 percent cited healthcare costs.
But what can government do to improve economic competitiveness?
The survey found 52 percent of businesses say it should reduce taxes, 24 percent want to see regulatory reform, 11 percent said the government should cut spending, 7 percent said government should increase tax incentives, and 6 percent said it should improve infrastructure.
Gioia said the survey didn’t drill down into detail about which taxes businesses would like to see cut. He said different businesses are going to have different “hot points.”
He said one of the things they have seen over the last several years is that the increase in the income tax “really hammered S-Corps, LLCs, and LLPs.”
“That’s one area we still hear complaints about,” Gioia said.
Kask said they also hear complaints about tax credit issues. He said small- and medium-sized businesses are having trouble using the tax credits they’ve earned.
“We want to make sure companies that have earned tax credits can actually use them,” Gioia said.
The state legislature approved a package for United Technologies Corporation earlier this year that allows the company to use up to $400 million in stranded tax credits. The goal of the legislation was to keep the state’s largest aerospace company in Connecticut as well as the jobs that come with it. It commits Pratt & Whitney to staying in Connecticut for at least 15 years and keeps Sikorsky’s corporate headquarters in Stratford for at least five.
The company has declined to say how many unused tax credits it has earned over the years.
As far as regulations go, the survey didn’t ask for details, but Gioia said one of the biggest hurdles businesses face is the high cost of healthcare from all the “healthcare mandates” in this state.
As far as other regulations are concerned, such as permitting, “it’s not just the state of Connecticut,” Gioia said. “It’s the state of Connecticut, municipalities, and some of it’s federal.” And it’s often “where federal and state regulations cross purposes.”
Gioia said Democratic Gov. Dannel P. Malloy has taken a “good first step” in addressing the issue, but “that’s not it. It’s not done.”
CBIA President and CEO John Rathgeber, said the Connecticut economy is challenging, but that’s the reason they launched the CT20x17 campaign earlier this year, aimed at making Connecticut a top 20 state for business by 2017.
“Economic competitiveness is not just a business issue but one that touches every community, every neighborhood, and every family in Connecticut,” Rathgeber said. “A competitive economic climate means more jobs, more opportunity, and a brighter future for everyone in the state.”