Now that some of the dust has settled after the announcement last week that General Electric would move its headquarters from Fairfield to Boston, a question my editor Christine Stuart asked shortly after the announcement (Will GE’s Move Impact The 2016 Elections?) has been answered.
If the reaction from Republican leaders is any indication, the answer is a resounding “yes.” And why not? There is very little to lose from politicizing it. After all, most Connecticut residents are either troubled, disturbed, or disgusted by losing the corporate headquarters of one of the largest and most prestigious companies in the world. And it would be almost impossible to argue that state government, with every branch and constitutional office under Democratic control, had nothing to do with it.
The only downside for the Republicans is that they might overplay their hand or run the risk of being labeled naysayers who are running the state’s economy down by bad-mouthing it, as Gov. Dan Malloy suggested last week on MSNBC and Senate President Martin Looney did, as quoted by Stuart.
“The bombast and hyperbole coming from Republican legislative leaders truly represents the dark side of party politics,” Looney said with a straight face. “It’s honestly harmful to the state of Connecticut.”
But that would be a hard thing to argue — first because the party out of power always complains about the status quo, which prompts the party in power to brand the other as a purveyor of doom and gloom. All but the most partisan of voters know this. But also because Democrats, in denying taxes have anything to do with the GE decision, have themselves conceded that Boston has something that Connecticut doesn’t. Are Democrats themselves talking their state down by making such a concession?
So if not for high taxes or better quality of life, then why did GE take its it 600 high-paying jobs, $1.8 million in annual tax revenue to the town of Fairfield, and a boatload of prestige to Boston? Looney did not say. But GE itself did. Though, to be fair, you can’t believe everything the company says. Still, the adjectives in the statement from Jeffrey Immelt were revealing.
The celebrity CEO bragged “that Massachusetts spends more on research and development than any other region in the world, and Boston attracts a diverse, technologically-fluent workforce focused on solving challenges for the world. We are excited to bring our headquarters to this dynamic and creative city.” In other words, Massachusetts and Boston are everything Connecticut, Hartford, Bridgeport, Stamford and Waterbury are not.
Republicans would be wise not to blame the GE move on taxes alone. As Stuart reported, Massachusetts has a corporate tax rate of 8 percent. Connecticut’s is 9 percent. The top personal income tax rate in Connecticut is 6.99 percent and in Massachusetts it’s 5.1 percent.
That difference alone wouldn’t be enough scare off a giant corporation like GE. Besides, as has been documented by The Courant’s Dan Haar, GE’s tax liability in Connecticut is actually quite low. Still, it doesn’t help that, according to a recent report from the Tax Foundation, Connecticut is second only to New York in having the highest combined state and local tax burden in the nation.
Nor should Republicans — or anyone, for that matter — complain about Fairfield County not being Massachusetts since there’s not much they or anyone else can do about it. But I think Senate Minority Leader Len Fasano is onto something.
“Now we can say there are ramifications for not having predictability and stability in our budgets,” Fasano said.
For all its problems, Massachusetts not only has all those colleges and high-tech firms inside the Route 128 corridor, but it is simply a better-run state. Lawmakers on Beacon Hill have had to deal with budget shortfalls, as we have in Connecticut. But those gaps have been relatively smaller and less frequent than ours, so the drama and disruption surrounding possible solutions has been muted. Ergo, both the practical and political environments are more conducive to doing business.
Will GE’s departure become fodder for Republican lawmakers running for election this year? Well, if the recent snarky pronouncements from House Minority Leader Themis Klarides and Assistant Senate Minority Leader Scott Frantz are any indication, you can bet it will be. And for good reason.
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