January 22, 2018

Business influence will be tested in legislature

Greg Bordonaro Editor

Connecticut's business community has always had a strong voice at the state Capitol, represented by lobbyists at the Connecticut Business & Industry Association and other industry groups.

Indeed, the notion that business interests are never heard or acted upon in Hartford, an argument made by some, is a fallacy. Last year several significant reforms were adopted as part of the bipartisan budget agreement passed in October including stronger spending and bonding caps and a requirement that the legislature vote on state employee contracts. Those were all things the CBIA and others have pushed for years.

But businesses' influence clearly hasn't been enough to change the trajectory of a state that has been consistently losing its wealth, population and economic competitiveness.

That's what spurred several high-profile current and former Connecticut CEOs to convince the governor and legislators to form the Commission on Fiscal Stability and Economic Growth, a mainly private-sector led coalition that will by March 1 propose comprehensive structural reforms to state government, hopefully leading to balanced budgets and economic growth.

The panel is a grassroots effort led by Bob Patricelli, the serial entrepreneur who recently sold his Avon physician practice management firm Women's Health USA Inc., and recently retired Webster Bank CEO Jim Smith.

Both men co-chair the 14-member commission whose other prominent participants include Jim Loree, president and CEO of Stanley Black & Decker, and Christopher Swift, chairman and CEO of The Hartford. They are trying to use their collective power and influence to convince lawmakers to tackle some third rails of Connecticut politics, including unaffordable union and unfunded retiree pension and healthcare benefits, all of which are major contributing factors to the state's poor fiscal health.

The group's motives are a mix of altruism — based on a desire to help a state that has been good to their own careers and lives — and profit-making — based on a need to operate in a stable/pro-growth state economy that will allow companies to recruit top talent.

The dynamics around the formation and potential impact of this group are intriguing. To many, they may be looked upon with skepticism. For those familiar with state government, the creation of panels and commissions to tackle Connecticut's fiscal and economic competitiveness issues is nothing new and many times their impact is muted.

Their typical role has been to raise the red flag about the many ills infecting state government, propose some remedies and then be sent home with a prescription that essentially goes unfilled. The lack of political will or courage on behalf of legislators often leads to hard decisions being postponed.

However, the can that lawmakers have been kicking down the road for decades is now a nearly immovable object. The challenges facing the state are so great, and the risks of further economic and fiscal deterioration so high, that the window to shift Connecticut's long-term trajectory is closing (more billion-dollar deficits await the state in fiscal 2020 and beyond).

The high stakes offer some hope that Patricelli, Smith and company will be able to convince lawmakers to support bold structural reforms. These are well-accomplished people who wouldn't put their reputations on the line if they didn't think they could make a difference.

Adding to the optimism is language in the budget that would appear to require the legislature to take some action on their recommendations, meaning it could be harder for lawmakers to just mothball their work.

However, most commission members are entering an arena to which they are not totally familiar. As CEOs, these corporate titans have been able to exert their will; as commission members they can only exert their influence.

And the political environment right now is a precarious one. The commission's recommendations, which are expected to tackle things like taxes, unfunded pension and benefit liabilities, transportation funding, urban decline, etc., are coming in a major election year in which the governor's seat and all Senate and House seats are up for grabs. That typically makes it difficult to pass comprehensive reforms.

In addition, Democrats are still the majority party in the House and they share power in the Senate, and while commission members say they are acting in a nonpartisan role, their recommendations are bound to upset a key liberal constituency: unions.

To honestly tackle Connecticut's fiscal problems, without significantly raising taxes again, the cost of government employees must be further tamed.

But if there ever will be a group that convinces lawmakers to make comprehensive and bold reforms, the Commission on Fiscal Stability and Economic Growth may have as good a shot as any.

And it's not too hyperbolic to say that Connecticut's future is at stake.

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