Labor and political groups advocating for Connecticut workers squared off Thursday against the nation’s eighth largest corporation in a symbolic gesture in downtown Hartford.
The chanting throng dropped off an “open letter” to General Electric at the Church Street headquarters of the Connecticut Business and Industry Association. The letter called out the company for being “deceptive and misleading” in its allegations that the state is not friendly to business. Protesters repeated “stop your lying” on the way through the revolving doors and “we’ll be back” on their way out.
Tom Swan, Executive Director of Connecticut Citizens Action Group, led a press conference in front of the building before entering the lobby to deliver the letter.
“CBIA, and exclusively CBIA, has undertook a dishonest misinformation campaign championed in many ways by GE, who is probably the largest tax evader in the entire United States,” Swan said.
He cited statements by CBIA president and CEO Joe Brennan criticizing the legislature’s plan to share half a percent of sales tax revenue with municipalities to address property tax concerns. Brennan has expressed doubt that businesses would actually see the benefit of that money in their property tax bills.
CBIA General Counsel Bonnie Stewart said the business group is advocating to delay implementation of the sales tax diversion plan for at least two years in order to evaluate the plan more fully against the findings of a tax study panel created last year by the legislature. The panel has been tasked with submitting a final report by January.
Stewart said the state will be facing an almost $1 billion deficit when the two-year budget expires, should it be signed as-is by Gov. Dannel P. Malloy.
“Virtually every single survey of businesses that I have seen over the last 10 years have listed property taxes as the biggest concerns for businesses in the state of Connecticut,” Swan said. “So in order to protect General Electric’s ability to hide their profits from the people of Connecticut and not to pay their fair share for education, our roads, and our healthcare, CBIA is going to screw the rest of their members by continuing to keep property taxes high.”
GE released a statement Thursday briefly contradicting the opposition.
“GE pays taxes in Connecticut and everywhere we do business,” the statement said. “We also employ thousands of people in Connecticut, we spend billions every year with suppliers in the state and support the thousands of people that they employ. We are incredibly active in the communities in which we operate and our economic and social impact in the state is very significant.”
The statement was a variant of the theme CEO Jeffrey Immelt shared with GE’s Connecticut employees last week in an email. In that same message, Immelt announced the formation of an exploratory relocation committee and invited employees to contact their legislators about the proposed tax increase.
Since then, governors from across the country have rolled out the welcome mat for Connecticut’s largest companies. Notably, the state of Indiana on Wednesday bought a full page ad in the Wall Street Journal offering support to GE, Aetna, and Travelers, “because friends don’t let friends pay higher taxes.”
The company has already sold off its private equity business for approximately $12 billion and is looking to sell most of the assets of the $500 billion, Norwalk-based GE Capital division over the next 18 months, according to the Associated Press.
The open letter to GE from the coalition, which includes the Connecticut AFL-CIO, Connecticut Citizens Action Group, and Connecticut Working Families, stated that corporate taxes in Connecticut accounted for 12 percent of tax revenue in the past but are now down to 3 percent.
The 2014 annual report from the Department of Revenue Services said 3,895 out of the 41,290 companies required to pay taxes in 2012 paid nothing more than $250. Corporations were also able to lower their corporate tax burden from $610 million down to $459 million with the use of credits and exemptions.
Swan cited a 2014 study by the Council on State Taxation showing the state is tied with North Carolina for having the second lowest business taxes as a share of gross state product, while Steward pointed to an Ernst and Young report that put Connecticut just under the halfway mark for competitiveness when it comes to taxes.
“We’re not the worst state. We’re not the best,” Stewart said. “But that’s before this tax package is adopted and implemented. After this, the situation changes significantly.”
That’s when she fears many businesses will move out of the state. She said she’s heard from many more businesses than just the ones that have released statements on the proposed tax package — and what they’re saying doesn’t bode well for the future of economic development in the state.
“I’ve been at CBIA nearly 30 years,” she said. “They’ve got me worried down to the core.”
William Buhler, a retired state worker from Cromwell, held a placard with a question for passers-by: “Why are you paying more taxes than GE?”
Buhler said he sees a contradiction in the business advocacy group’s claims that the tax increases will negatively affect all businesses.
According to Buhler, it’s small and mid-sized companies that really suffer from the status quo. “They’re taking up the slack for large corporations that are not paying their taxes. It’s an imposition on small businesses to allow large corporations to not pay tax,” he said.