The ancient scourge of taxes along with GE”™s flight to the tax-friendly clime of Boston served as the foundation for Barnum Financial Group”™s business and economic forum on Jan. 26 at Gateway Community College in New Haven.
The dais featured Peter Gioia, vice president and economist for the Connecticut Business and Industry Association; John Ermer, partner with accounting and business consulting firm Beers, Hamerman, Cohen & Burger, with offices in Fairfield and in New Haven; and Kent Hanley, executive vice president, William Raveis Real Estate in Shelton.
It was Gioia who led the charge against the state”™s anti-business legislation.
“We’re in recovery at roughly the same rate of recovery for the United States. The problem is we’ve been behind the national rate for quite some time. What holds us back are our own self-inflicted wounds. The legislature, with its repeated antibusiness moves, prevents the kind of investment that can supercharge our growth.
“What we need is a moratorium on antibusiness policy moves and a determination to create a sustainable pattern of spending that matches expected revenue,” he said. “If we do that, we have a chance to grow.”
He said, “Connecticut struggles with the economy like every other state. But the other states are outsmarting us. They’re a lot smarter with public policy.” He said the state does not instill confidence in business. With confidence in the equation, “If things are not that good, but there’s a good indication things will get better, people will invest.”
Gioia said during one of three presentations, one from each panelist, “The fiscal situation is the biggest problem. I as a business owner need to feel confident I’ll make money this year and in 10 years in order to make this investment. If all you see is the potential for things to get worse in competition with other states that seem to be getting better, better, better, you’ve got to say, Where”™s the safest place to invest my money?”
Gioia also ticked off regional positives. They included growth in commercial aerospace and Defense Department manufacturing; a finance industry that “has stopped hemorrhaging jobs and is showing modest growth;” “a super-productive, well-educated work force” and location. “All that”™s pretty strong,” he said.
“I’m fairly optimistic,” he said. “We ended the year stronger, with more jobs and more opportunity.” He called fiscal and public policy issues, “the decisions we can control.”
Ermer said, “We have some problems and messes to clean up, but like Peter was saying, a lot is positive.” Still, in regard to state and local corporate taxes, he said, “Hartford, we have a problem.”
Ermer noted GE did not move to Nicaragua, but to Massachusetts and said, “Our biggest competition is other states.” Specific to recent events, he said, “If you’re hearing the GE move had nothing to do with taxes, don’t believe it.” Among the observations of his presentation” “We’re not helping ourselves with our tax environment.” Again citing Gioia he said, “Like Peter was saying, the state’s tax environment is controllable. A lot of factors are not.”
Hanley said his company’s 120 offices in the Northeast and newest address in Naples, Fla., had combined to see a 9 percent uptick in real estate transactions year over year, 77, 248 in 2014 and 84,176 in 2015, with sales volume up 5 percent (to more than $28 billion).
“We’re not moving to the suburbs,” he said regarding trends. “We want to walk to trains and restaurants and have convenient access to trains and buses. If you live in and around cities, people are migrating there.”
As for those who might previously have considered homes he termed “McMansions,” consumer tastes are changing. “The cost of maintaining these homes is changing their habits. They’re concerned with landscaping bills. They would rather watch expenses and keep that money in their pocket. A lot got hurt in 2008 and they don”™t want that again.”
Hanley cited evidence of a Constitution State wanderlust, noting that when most people move, they move nine to 12 miles; in Connecticut 30 percent are leaving the state.
Individual pockets of real estate are doing well, he said. Darien, for example, saw transactions and sales volume rise. New Canaan for 2015 compared with 2014 witnessed transactions off 7.6 percent and volume off 8.1 percent. (Fairfield and Greenwich each saw transactions up and volume down.)
Hanley said regarding mortgages, “We are in a more responsible lending environment.”
He said statewide home sales figures are “down a little” but as for what he termed doom and gloom, “Some of the statistics don’t show that.” He noted his age, 58, and said the interest rate on his first mortgage was 17 percent. “Today, interest rates can’t go much lower,” he said. “It’s a good time to buy.”
