General Electric’s decision to move its corporate headquarters from Fairfield to Boston ignited a partisan blame game Wednesday in Connecticut.
GE had been threatening through 2015 to leave Connecticut. Its leaders expressed anger over, among other issues, a new state law requiring corporations to be more honest in accounting for where they do work — and therefore where they should pay taxes.
Gov. Dannel P. Malloy responded by negotiating a change in the law and other benefits for GE. Meanwhile, a race-to-the-bottom corporate bribery competition ensued among other states looking to lure GE with tax breaks. Connecticut, too, offered taxpayer giveaways, but was outbid by Massachusetts, which reportedly ponied up $120 million in property tax relief, according to the Boston Globe.
Once GE’s decision became public Wednesday, the state Republican Party pounced on the news to blame Malloy and his fellow Democrats for taxing corporations and running a fiscally unstable government ship.
“Governor Malloy’s cavalier attitude toward this huge community void is, ‘You win some, you lose some.’ But for Connecticut families and the Fairfield region, this loss is nothing short of devastating,” crowed state GOP Chairman J.R. Romano in an email blast. “Massachusetts and other states aren’t just drawing away Connecticut businesses because their taxes are lower. They are eating our lunch because fiscal instability and anti-business sentiment from the Democrat majority make Connecticut unappealing and unwelcoming.”
He and other Republicans and corporate leaders depicted the GE move as a wake-up call about the need to improve Connecticut’s “business climate.”
Malloy, meanwhile, just back in Connecticut from sitting next to First Lady Michelle Obama at the State of the Union address, acknowledged at a 2 p.m. Capitol press conference that “of course we are disappointed.” He said he’d received assurances that GE will keep many of its workers in the state. He insisted GE is moving its headquarters because of a high-tech corporate strategy shift, which fits better with Boston’s high-tech economy.
State Senate President Martin Looney sounded a similar theme in a prepared statement: “General Electric is rebranding its image and shifting its central business platform away from heavy industry and financial services to digital software and technology, changing the very structure and composition of its headquarters. While I am disappointed that GE has chosen to relocate its headquarters, given all the facts, moving some of their employees to Boston’s Seaport matches their shift in business strategy. It is clear that GE’s decision has nothing to do with taxes, or even business costs, and cannot fairly be viewed as a referendum on Connecticut’s growing economy. Connecticut’s unemployment rates have dropped to the lowest level since March 2008. In 2015, Connecticut saw the sixth-largest unemployment drop in the country. In fact, GE just increased its workforce in Connecticut after purchasing Alstom Energy, adding 1,200 jobs in Windsor and Bloomfield.”
As early as last June, Looney declared that GE had already made up its mind to move and was using complaints about taxes as cover. Click here and on the video at the top of this story for more on that.
Malloy Wednesday called the GE headquarters move a reflection of the need not for different taxing policy, but for the kind of massive transportation improvements he has been pushing.
“Businesses care about transportation infrastructure, and we will continue to make new investments to create a more modern transportation future. Businesses care about talent, and we will continue our investments in our higher education system in order to connect them to the needs of high-tech employers. Businesses care about state government fostering new areas of innovation, and we will continue to invest in high-tech startups, small businesses, and major employers like United Technologies. And businesses care about how states budget, and now is the time to continue our bipartisan efforts to reform our budget, find new ways to pay our pensions, and create a more sustainable and predictable state budget,” Malloy argued.
The State Senate’s top Republican, Len Fasano, distinguished between GE’s decision to leave and its choice of new headquarters.
According to this story in CT News Junkie, “Fasano said he’s sure GE picked Boston because of the urban environment and access to a highly educated workforce, ‘but that’s not why they left Connecticut.’ He said they left Connecticut because of the lack of predictability in its tax structure and the disrespect they were shown by some lawmakers who believed they were ‘bluffing.’”