In the first exclusive interview with State Representative Richard A. Smith, he states that Connecticut’s true unemployment rate is more like 8.97 percent. The economy is failing terribly, and Connecticut-based companies and residents are continuing to leave the state in droves for better opportunity and less taxes elsewhere. The state is in job growth crisis mode, and it will take at least three-and-a-half more years just to recover from all of the jobs lost since the recession began.
In light of Connecticut inheriting a $3 billion dollar deficit next year, according to the non-partisan Office of Fiscal Analysis, the second part of this interview with State Representative Richard A. Smith focuses on what he thinks it will take to repair the economy. The proposed action plan would, concurrently, help tremendously with getting the entire workforce population working again.
The question posed to Connecticut State Representative Richard A. Smith:
How do you think Connecticut can get back on track with improving the economy and creating jobs to get the unemployed working again?
Here are 6 highly realistic solutions that sound simple, yet can fix the bleak Connecticut economy…
- Avoid tax increases.
The short-term goal is to avoid any more tax increases. To accomplish this, the budget needs to have a $1.4 billion cut next year and by $1.6 billion the following year. Over the long-term, we should be trying to roll back some of the $1.8 billion in annual tax increases imposed by the current administration, which began in 2011.
- Stop spending hundreds of millions of dollars in “corporate welfare” money to keep corporations from leaving.
I believe that job growth can start to happen if the state government stops spending hundreds of millions of taxpayer dollars to keep corporations from leaving the state.
The great majority of the workforce in Connecticut is the small business with 10 employees or less. Governor Malloy and his legislative supporters have doled out over $271 million in corporate welfare spending for the First Five Program.
This amount does not include $20 million for UBS to stay in Connecticut, which was not part of the First Five Program that Governor Malloy created. It also does not include $300 million for Jackson Lab. The Governor, via the Legislature, also allocated $115 million for Bridgewater, a major hedge fund company to move to Stamford. Thankfully, Bridgewater backed away from their deal with the state.
Instead of handing out hundreds of millions of dollars to major corporations, we should reduce our corporate taxes so our smaller businesses have money to reinvest.
- Help small businesses.
Another way to help our small businesses is to eliminate the special assessment tax businesses pay on the money the state borrows from the federal government, and stop the practice of overtaxing and over-regulating. Businesses are fearful of expanding and hiring more people because of the uncertainty of higher taxes and the inability to budget for the same.
The dollar amount of the special assessment varies from year to year. This year, it was approximately $10 million. Every business is assessed a tax to repay the loan Connecticut borrowed from the Federal Government to replenish the unemployment fund. This assessment is on top of all the other taxes businesses have to pay.
We should also eliminate the business entity tax which is an unnecessary tax burden on our employers.
- Improve transportation and mobility for workers.
The Legislature created a Special Transportation Fund (STF) for repairing highways, mass transit systems and our infrastructure.
According to ASCE, 73 percent of Connecticut’s major roads are poor or mediocre quality, resulting in $847 million in extra vehicle repairs to our residents. Nearly 10 percent of the bridges are structurally deficient with another 25 percent deemed functionally obsolete.
Although this fund is restricted and the need for repair is obvious, each year Governor Malloy and his legislative supporters have raided the fund to balance their budget.
It is time to reinvest in our infrastructure, which will not only create jobs, but will also attract businesses to Connecticut knowing they can produce and ship their product without delay.
- Reduce the gas tax.
The gas tax is way too high which makes Connecticut too expensive for truckers to come here.
Connecticut’s gas tax is the third highest in the country and our gas price per gallon is the fourth highest in the country.
Consequently, we are a pass-through state for most motorists because the cost of gas is cheaper in the majority of our boarder states. As a result, we miss out on this major source of economic stimulus.
- Create better training and education programs for in-demand jobs.
Although we have a very educated workforce, there is a need for better training in the manufacturing sector, which our schools should be equipped to do.
Also, as trends in industry change, like outsourcing workers, we need to provide training and educational opportunities to help those who have lost jobs so they can remain viable members of the workforce. There are studies that project which fields will need additional workers and we should be in the forefront to equip our residents with the knowledge to partake in those jobs.
This exclusive interview originally ran on Examiner. It was recently reprinted on October 8th by the Citizen News, a local newspaper in Connecticut. This article also appeared in the CBIA.com (Connecticut Business & Industry Association) member eNewsletter and is circulating on LinkedIn Pulse. Contributed photo.