Connecticut Must Look Ahead

It’s almost impossible to quantify the negative effects of the global recession that has gripped America and Connecticut over the past year. Greedy Wall Street investment frauds led to a meltdown in real estate, which sent banks and investment firms into financial ruin, which clamped down on business and personal credit, which led to massive unemployment, which resulted in hundreds of millions of dollars in lost revenue while simultaneously exerting once-in-a-lifetime demands on a variety of state services.

It’s not a pretty picture.

The state and national economies are now inching their way back to health — Connecticut’s unemployment rate dipped to 8.2 percent in November — but it’s going to be a slow and painful recovery. Wall Street may have reverted to some of its worst habits by issuing multimillion dollar bonuses for firms that have just repaid their publicly-guaranteed federal loans, but that doesn’t mean the rest of the nation needs to fall back into their old routines, too.

I include Connecticut — especially Connecticut — in this warning. Our glorious, industrial past — with its healthy employment rates, substantial salaries, lofty educational attainment and high homeownership levels — can be repeated, but only if we look forward and follow the proper path out of stagnation and into what can be a bright future.

How do we do that? A brand-new report by the Legislature’s non-partisan Program Review and Investigations Committee titled, “Connecticut’s Economic Competitiveness in Selected Areas,” provides a pretty good road map for Legislative initiatives as well as a much-needed executive-branch kick in the pants.

Many of the PRI recommendations buttress what the Commerce Committee has been working on for the past half-decade. As Senate chairman of the Commerce Committee, I often feel as though we have been a lone voice crying in the wilderness. Now I hear a friendly echo in this report.

One of PRI’s first recommendations is that Gov. Rell’s economic development plan for Connecticut actually became … a plan. The governor issued a 529-page report in September, approximately 500 pages of which is economic development history and a mere 20-plus pages is a list of unprioritized recommendations with no benchmarks and no timelines for achieving them. PRI suggests, and I wholeheartedly agree, that the governor and the state Department of Economic and Community Development indicate their economic development priorities for 2010, a timeline for achieving them, and who will achieve them.

Three other areas where I believe the Commerce Committee will pay particular attention next session are in the reinstatement of the Connecticut Competitiveness Council, a reinvestment in the state’s business cluster initiatives, and a reintroduction of angel investor tax credits.

The Connecticut Competitiveness Council was begun in 1996 as an informal group of more than 100 business leaders charged with looking at ways to improve Connecticut’s business environment. The Council was terminated by Gov. Rell in February 2009. PRI calls for the reinstatement of the Council along more bipartisan lines, with legislative as well as executive appointments. I agree.

Connecticut used to have a strong commitment to its industry clusters, but recent state budget cuts have hamstrung economic activity there. We need to reinvest what precious state tax dollars we can into industry clusters that include aerospace, agriculture, bioscience, metal manufacturing and information technology. Retail and other service-economy jobs are not what are going to pull Connecticut out of this economic recession. Only what I term “knowledge economy” jobs are going to pay the salaries and benefits that retain our young college graduates and afford them homes, health care, local property taxes and college educations for their children. We need to invest in our strengths.

Finally, an angel investment credit is an issue that I have been committed to for several years. I believe there finally appears to be a growing consensus that Connecticut needs to tap into its enormous reserves of private wealth and provide tax credits to private investors who invest in Connecticut’s small and start-up industries, those little engines of growth who represent the vast majority of business employers in the state and who will help rebuild Connecticut’s reputation as a regional and national industrial powerhouse.

The time for hand-wringing is over. We in the legislature, the governor and private-sector executives would be much better served by taking advantage of the road map that has been laid out before us and walking the path together toward economic prosperity for all.

That is Connecticut looking forward, that is our new horizon, and that is where we must be heading.

Gary D. LeBeau (D-East Hartford), is a state senator from East Hartford and is running for governor.