Face the Facts: Providing More Resources to Small Businesses in Connecticut

One of Gov. Ned Lamont's goals when he first took office was to try to make Connecticut a more business-friendly state after years of having a reputation of being just the opposite of that.

One of the point people to help him do that was David Lehman, a former Wall Street executive-turned commissioner of the Department of Economic and Community Development.

Now as the governor starts a second term, Lehman said he's stepping down. He talks about whether or not Connecticut is more business-friendly now than it was four years ago.

Mike Hydeck: So let's talk a little history up front. GE left Connecticut. Years later, the CEOs of the big insurance companies threatened to leave, too, if a public option was passed. Big business looked bleak at that point. Assess it now by comparison.

David Lehman: The state is in a very different position. So on the fiscal front, you know, we've had years of surpluses, four years in a row. We've had almost $6 billion of debt paid down to our pensions, which has been an issue that needs addressing and will continue to be addressed over time. And you have a $3.3 billion rainy day fund. So fiscal stability and tax certainty was critical. And that message got out, and will continue to get out from the governor. And right now, if you look at the numbers in Connecticut, you're seeing record business starts. You're seeing roughly 1,100 businesses per month starting in the state of Connecticut. And we haven't seen those numbers since 2006 in the state, so 15 years. And if you look at the bigger businesses, you've seen stability, and you've seen that many choose to grow or come to Connecticut to grow. So I think you've seen a very different Connecticut from a business perspective. And I think the data bears that out.

Mike Hydeck: On the upside, Sikorsky signed another lease to stay here, which is another good thing as far as a big company is concerned. So, you said a lot of business startups, which means by and large, those are small businesses. So we've heard it from local and national politicians, that small business owners make up the engine that drives our economy. There are so many people who help supply Sikorsky and these other big businesses here. I recently talked to a bunch of business owners across different kinds of businesses. One, a third generation owner of a family business, who asked me what is it that the big companies get all the breaks? The cost of his electricity, he says, to run his machinery at his machine shop is a significant burden. Are there packages that can help the small guy?

David Lehman: Yeah, so a couple of things on that. I mean, we're very focused. Small business is the engine that drives the economy. And one of the reasons I'm so constructive on the economy going forward is that record small business formation. Those are the businesses that are going to hire, that are going to grow, and we're very focused on making sure those businesses are successful here in the state. One of the things we've done under the first four years of Governor Lamont's leadership is we scaled back in a meaningful way a lot of the big incentives, the big breaks, I think you mentioned two large businesses. So to put numbers on it, under the last three years of the previous administration, close to $600 million in bonding or borrowing was done for incentives. And much of that went to larger businesses, some smaller. Under the first three years, or three and a half years of Lamont, the number's around $150 million. So there's over $400 million of savings, less borrowing. So we really reduced those incentives. And we're focused on a level playing field that works for all and we're focused on those small businesses. The governor also rolled out a small business boost program recently, that we'll lend to small businesses from $5,000 to $500,000. So less focus on big incentive programs, more focus on very formulaic performance-based incentives, and programs that are targeted at small businesses, as well as communities across the state.

Mike Hydeck: So oftentimes, when it comes to small businesses, they are so busy making the widgets and trying to get new customers, messaging is a major part of that business boost program. What's it called? How do they apply? Where do they find out more about it?

David Lehman: Yeah, so CTsmallbusinessboostfund.org is the website. They can just google CT Small Business Boost, and you'll see that it's one website, you're able to access, again, no fee, $5,000 to $500,000 loans from a number of different lenders. And the whole application process is on that website. And it's not just loans. There's also technical assistance if businesses are looking for a little bit of help, or to be referred to someone that can assist them on things around business plans, budgeting, etc., away from the need for capital.

Mike Hydeck: Another thing, I talked to a real estate broker. Here's another example, with 40 years service here in Connecticut, they say things that happen year in and year out for people who are veterans in their business seem like a money grab from the state, like the annual license fees. If I'm a salesperson, I'm out in the field and I've had a proven track record. I'm still paying X amount, couple hundred dollars a year, three, four hundred dollars a year. What's your response to [that]? It seems like if you've been there, done that, you shouldn't have to pay so many fees?

David Lehman: Yeah, there's been a focus on alleviating some of those fees like the biannual business tax that the governor took a look at in 2019. But certain administrative fees, you know, those are required to administer some of the licenses and the programs that are out there. So there is a focus and it shouldn't be viewed as a money grab but a small administrative fee we think is appropriate in certain areas. But ultimately, that is not a source of revenue or a big money grab. That's what's needed to administer certain licenses and certain programs for businesses.

Mike Hydeck: So I got about a minute and this is not the easiest question to answer that quickly. Health care costs kill small businesses. It's very, very difficult, from zero to 50 employees, to try to reform healthcare costs. What's being done to take care of that?

David Lehman: Yeah, so this is something I think you should expect more in the coming year or years, engaging business to address healthcare costs. Because healthcare costs have been rising and outpacing inflation in many instances. So we want to work with business, the administration wants to work with businesses to try to go for some common sense reductions or where we can limit the growth of healthcare costs. So the healthcare system is complicated, as you know, as you mentioned, it's a tougher question for one minute, but there is a goal and you'll see more engagement of the business community to try to work with the administration to lower those costs. Because we agree that is an impediment, not just here in Connecticut, but across the country, but one that needs to be addressed.

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