Home Economy GE leaves ‘a hole in Fairfield’s soul’ — and economy

GE leaves ‘a hole in Fairfield’s soul’ — and economy

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What does the future look like for Fairfield County in the aftermath of General Electric’s departure last year? Fairly gloomy — even if one discounts GE’s relocation to Boston entirely.

That was the main takeaway of “Moving Forward in the Absence of GE,” Fairfield University’s inaugural Masters of Public Administration summit held April 11 at the school’s Quick Center for the Arts. Featuring an array of city and state legislators, the discussion primarily involved talk about how everyone needs to knuckle down and work together to help Connecticut’s economy turn around. Those statements led several in the audience of about 550 people to loudly call out “How?” on more than one occasion.

Trumbull First Selectman Tim Herbst, considered a likely Republican candidate for governor next year, said that when a General Electric or Aetna exits — the insurance giant has been in Hartford since the 1850s but has recently flirted with following GE to Boston — it creates a “multiplier effect,” in which the abandoned community not only loses income from departing employees but also from restaurants, dry cleaners, landscapers and other businesses dependent on those employees and their company.

Herbst said the costs of living, transportation and property taxes have made Connecticut particularly non business-friendly. “We need to be facilitators of business,” he said, calling for reducing corporate regulations “where appropriate,” cutting through red tape and implementing more business-friendly tax initiatives.

Fairfield First Selectman Mike Tetreau noted that when GE’s 800 jobs left his town, only 200 went to Boston while the remaining 600 ended up in Norwalk — good for the state, perhaps, but not so good for the town of Fairfield. In any case, he said, GE’s departure “was a hit on the prestige and the psyche of Connecticut.”

Although Sacred Heart University’s purchase of GE’s Fairfield campus for $31.5 million was a welcome development, Tetreau said that the property will no longer be subject to the same property tax payments given SHU’s nonprofit status. GE had been Fairfield’s largest property taxpayer for a number of years, paying some $1.5 million for real estate property and another $291,000 in personal property taxes.

The campus will now qualify for the state’s PILOT, or payment in lieu of taxes, program, designed to compensate a local government for some or all of the tax revenue lost due to tax-exempt ownership or use of a particular piece of real property. Even so, Tetreau said, the state’s PILOT compensation, which had originally been for 70 percent of lost tax revenue, is now around 15 percent.

Ken Flatto, the city of Bridgeport’s director of finance and CFO, said that GE’s exit had left “a hole in Fairfield’s soul” and maintained that corporations should not play cities against each other in an effort to find the best deal. “That leads to the diminishment of a community,” he said. “These corporations need to recognize that communities matter.”

State Rep. Brenda Kupchick decried what she called the state’s “shell game” when it came to budgets. “Every year Connecticut does not manage its budgets properly, so when they come up short, companies know who they’re coming after,” the Republican lawmaker said. “They know they’re going to get hit with another tax.”

Mark LeClair, Fairfield University professor and director of the Masters of Public Administration program, said that the state’s traditional “three-legged stool” that props up the economy — the defense industry, colleges and universities and insurance agencies — remains strong. “Sikorsky leaving would have been an even bigger hit” than GE’s, he said, referring to the $220 million deal that Gov. Dannel Malloy struck with the Shelton-based aircraft manufacturer to keep it in the state last October.

Joseph McGee, vice president of public policy and programs at the Business Council of Fairfield County, wondered if the state has the fortitude to fix its pension funds problem while taking fuller advantage of the digital revolution, whose potential effects he likened to those of the Industrial Revolution.

McGee also raised the still-simmering issue of reintroducing tolls as a way of generating income, reasoning that every other state in the region has a toll system in place.

State Senator, Hwang, another likely Republican candidate for governor in 2018, dismissed the highway tools as “another tax” before agreeing with McGee that if the monies collected could be placed into a “lockbox that stays locked” and are not appropriated for other uses, he might support the idea. As it now stands, Hwang said, the government can “siphon it before it gets to the lockbox.”

Herbst was also unenthusiastic about the tolls proposal, saying that past promises about how the state income tax, first passed in 1991, and casinos, approved in the 1980s, were supposed to “solve all our problems” and had failed to do so. “You have to hold people in both parties accountable” for what they do moving forward, he said.

Both Republicans and Democrats on the panel largely rejected an audience member’s suggestion that universities be taxed to help address the budget deficit.

Hwang repeatedly called for bipartisan cooperation to find a way out of the state’s fiscal crisis. “We all need to truly, honestly vote what’s in the best interests of the people we represent,” he said.

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