Surpluses and profits foster optimism among business leaders in the fight against terrorism
Connecticut businesses took a more positive outlook this year and felt cautiously optimistic about the economy, thanks in part to successful efforts by state leaders to curb spending, pay down long-term debt and build the state’s rainy day fund, according to a survey of more than 3,000 CEO on Thursday.
In an annual survey of its members, the Connecticut Association of Business and Industry found that three-quarters of companies saw their most profitable year in 2022, and two-thirds expect profits to grow this year. The CBIA also heard optimism among its members about the state’s fiscal direction — a sharp contrast to the decade following the Great Recession, when the state’s finances were far more precarious.
“We’ve had budget surpluses for several years, and I think you can’t underestimate the morale boost that is,” Dobie McDowell, founder of McDowell Public Relations, said during a panel discussing the survey results with the association on Thursday. . By next winter, Connecticut will have paid off its long-term pension debt by $7.7 billion over the past four years. The state’s rainy day fund is $3.3 billion, the legal maximum.
“Just knowing that you don’t have that burden anymore, I think that’s a real positive,” McDowell said.
However, the glimmer of optimism in the survey results was coupled with disappointment that despite the state’s fiscal strength, lawmakers failed to significantly reduce the tax burden on businesses during this year’s legislative session.
A proposal by Gov. Ned Lamont to reduce what is known as the “pass-through entity tax” has not received approval from the Legislature. This measure alone could have saved more than 120,000 small and medium-sized businesses combined up to $60 million annually, according to the CBIA.
“Things are going well here, and the state’s finances are in good shape, but we’re not seeing investments in the business community like Connecticut can, and that’s starting to frustrate business owners,” said Chris DiPentema, the state’s president and CEO. CEO of CBIA.
The state’s financial health is important because it instills pride in the people who do business here, said Christina Lampe Onerud, founder of energy storage startup Cadenza Innovation. “Yes, we have some clean-up to do, but I think we have the opportunity now, because our finances are in good shape, let’s seize this opportunity and invest,” she said.
For her part, Lamb-Onerud would like to see Connecticut support the clean energy sector, noting that the state’s high energy costs make it a good place to try alternatives — like the batteries her company is developing.
Rodney Butler, Chairman of the Mashantucket Pequot Tribal Nation, said he was proud of the tribe’s recent investments in adding new business lines at Foxwoods Casino, but he was less optimistic for the months and years to come. He said entertainment revenue is a “leading indicator,” meaning spending in that sector can forecast broader economic health — and he said casino slot machine revenue fell about 4% last month.
“That’s just the reality of economic cycles, and we’ve done well,” Butler said. “As the broader economy begins to slow, let’s make sure we don’t lead the pack on that. And let’s see what we can do as a country to make sure we’re lower than everyone else and that we continue to support businesses.”
State Sen. Kathy Austin, who attended Thursday’s event, said the “fiscal hurdles” state leaders are committing aren’t just important for boosting business sentiment.
“It’s not just a business issue. The general public likes the fact that they can count on certain things to happen,” Austin said.
“I was there in the 2017 time frame when we were looking for sofa cushions for $100,000 here, and another $10,000 down,” she said. “I don’t want to see that happen because it only hurts the services that people need,” such as health care, heating assistance and support for nonprofit providers, she said. “I look at surpluses as a way to support that if we go into a downturn.”