General Electric is shipping up to Boston and it's more about them than about us.
Connecticut’s residents, business owners and politicians responded to news last week that GE will relocate its global headquarters from Fairfield, Connecticut to Boston, Massachusetts. The departure of the company headquarters, which creates 800 jobs and holds many local economic ties, comes as a serious blow to Connecticut.
Many outspoken voices and editorials focusing on the move were quick to point fingers at Governor Dannel Malloy, who’s presided over some of the biggest tax increases in Connecticut history. GE however, isn’t the sad martyr of an overtaxed business recent news coverage seems to be portraying it.
GE, as it turns out, has accepted as an incentive around $150 million in corporate welfare from Republican leaders in Massachusetts for the move, according to the Hartford Courant. So in a time of undoubted disappointment over the loss of GE and a search for something or someone to blame, Connecticut’s residents should instead honor a decision against expanded corporate welfare in our state.
As for GE, leading Democratic presidential candidate Bernie Sanders recently listed the company as #1 on his U.S. Senator’s website’s list of the top 10 corporate tax avoiders. Sanders’ website notes that GE’s CEO, Jeffrey Immelt, has a retirement account with an estimated worth of $59 million, and while serving as director of the New York Federal Reserve during the financial crisis, gave his own company $16 billion in financial assistance.
CEO Jeffrey Immelt is also a member of the Business Roundtable, a group working to raise the eligibility age for Social Security and Medicare to 70, to cut benefits for veterans and social security recipients, and to cut and replace more corporate taxes with tax increases for working families. In other words, Immelt is not the kind of guy who should be calling all the shots with Connecticut legislators.
Immelt and GE lead the nation in tax avoidance, shipping of jobs to China and corporate terrorism against state budgets and lawmakers. According to the Hartford Courant, GE has typically payed the minimum state corporate tax of $250 a year. Why not make space for a corporation that respects - even if only in the slightest degree – Connecticut’s tax laws, the local economy, and the many uses and advantages of its contribution to Connecticut’s tax base? For years now, GE has tried to hide behind the taxes paid by its employees through income and local sales taxes as a viable-enough contribution.
According to the Hartford Courant, despite being labeled a “hostile” business state, Connecticut has provided businesses with at least $4 billion in subsidies since 1992 – but this doesn’t seem to be the real issue. Strangely enough, the partisan critics pointing fingers at Governor Malloy for not making a satisfying corporate welfare offer to GE are the same folks who criticized his First Five program and corporate tax break talks for Bridgewater Associates and others in recent years.
The problem isn’t so much Malloy, or even the Democratic tax adjustments that have aimed at fixing the damage done by past Republican leadership’s deregulation and tax-slashing, but a battle over the willingness of our state to bend to the will of corporations. Giving more corporate welfare isn’t the answer when corporations like GE dodge taxes so heavily as it is, especially in the face of a budget deficit at $500 million and rising.
Connecticut is a state that, under Democratic leadership, has made significant gains in education, healthcare reform, gun safety, the minimum wage and, albeit with slightly higher taxes, a thriving private sector. Continued investment in Connecticut education, provided Governor Malloy chooses correctly in his investment of taxpayer dollars, means a growing, educated and skilled workforce that localizes innovation with or without the presence of big corporations like GE.
There is some truth to the notion that locating in Connecticut is a substantive investment for business, and to access our workforce small businesses and corporations alike are expected to invest in communities through tax dollars that fund essential public programs and state government. By chasing a $150 million corporate welfare package provided by Republican leadership in Massachusetts, GE leaves behind those principles – but again, it really says more about them than it does about us.
Connecticut, with its many businesses and employers who do choose to pay their fair share of taxes, will be okay.
Bennett Cognato is a contributor to The Daily Campus opinion section. He can be reached via email at email@example.com.