But, says CBIA’s new leader, realizing that potential depends on policymakers’ commitment to making Connecticut a top state for business
This month marks the beginning of Joe Brennan’s tenure as president and CEO of Connecticut’s largest business organization.Having served as a lobbyist, senior vice president of public policy and, most recently, executive vice president of CBIA, Brennan comes to the post with 26 years of experience advocating for Connecticut’s business community.
He succeeds John Rathgeber, who retired after 37 distinguished years at CBIA.
In December, CBIA News talked to Brennan about his goals and aspirations for the association and his plans for helping Connecticut become a top state for business.
CBIA News: How have your years at CBIA and previous experiences prepared you for your new role?
Brennan: First of all, I am honored to lead such a great organization representing so many wonderful companies. And it’s an honor to succeed someone as talented and dedicated as John Rathgeber. Working alongside him for 26 years has given me confidence that I can successfully represent our members.
Before coming to CBIA, I studied government and politics in college, which gave me a strong interest in public policy. And practicing law for several years in a small law firm made me aware of the difficulties of running a small business.
But the most important thing has been the time I’ve spent at hundreds of member companies over those 26 years, doing plant tours, company visits, and meeting with business owners and their employees. It’s given me a real perspective on the value they bring to the state and the challenges they face in trying to be competitive in a high-cost state like Connecticut. And it made me determined to work as hard as possible to help employers and employees succeed here.
CBIA News: What do you hope to accomplish in the months and years ahead?
Brennan: There’s a lot, but three things are at the top of my list. I want to grow CBIA and expand the value we bring to our members—to make it an organization that every business in Connecticut wants to be part of.
And I want to do more to articulate what our members do and what they’re like—to paint an accurate portrayal of businesspeople and what they contribute to Connecticut.
The fact is that they’re passionate about their businesses, the people who work with them, and helping their communities in many philanthropic ways. And they care about the state and trying to make it the best it can be.
Most of all, I want to aggressively pursue the goals of the CT20x17 campaign—a multiyear effort to improve Connecticut’s business environment and its ranking as a business-friendly state.
In essence, the campaign is designed to help the state reach what I believe is its enormous economic potential.
CBIA News: Where does that potential come from?
Brennan: We have world-class companies that are the envy of other states and countries, a rich history of entrepreneurship and innovation that’s still going strong, a great location between New York and Boston, a great quality of life, and—probably most important—a tremendous skilled workforce.
Connecticut doesn’t have many natural resources; our top resource is our people. It’s what has made the state a successful place throughout our history, and having that pipeline of skilled workers at a variety of levels will continue to be critical to the success of Connecticut companies.
For a variety of reasons, however, we’re not reaching our economic potential. We’ve seen some progress since the end of the recession, but not nearly enough. That’s partly attributable to the fact that Connecticut does not have a great reputation nationally as a good place to do business.
CBIA News: How do national business climate rankings hurt us?
Brennan: The two annual studies that are probably cited most often are America’s Top States for Business by CNBC, and the Best States for Business by Forbes. In 2014, CNBC ranked us the 46th best place in the country to do business. Forbes dropped us three spots in 2014, from 33rd to 36th.
When companies, whether multinational corporations or single entrepreneurs, are looking to make investments, they want to get a reasonable return on those investments. As they do their due diligence before making a locational decision, one of the things they look at are business climate rankings.
Because Connecticut ranks so poorly—not only nationally but also when compared to some other states in our region—it makes it difficult to attract the investments we need to grow the economy and create jobs.
The CT20x17 campaign is designed to attack that problem head-on.
CBIA News: What are the main factors that drag us down in the rankings?
Brennan: Most of these studies weight various factors differently, but they all weight cost of doing business very heavily. CNBC ranked Connecticut 47th in that category in 2014, down from 43rd the previous year.
Our state will likely never fare particularly well there, because we’re in a high-cost region of the country. But as Michael Porter of Harvard has often said, economic competitiveness is not about being the cheapest state to do business, it’s about being the best state to do business.
Nevertheless, there are areas where I believe the cost of doing business in Connecticut can be reduced—significantly in some cases—including energy, environmental compliance, state and local taxes, healthcare, and labor mandates.
CBIA News: Our surveys show a lot of dissatisfaction with the state’s transportation infrastructure, especially from businesspeople in Fairfield County. Does infrastructure factor into the rankings?
Brennan: Yes, and it hasn’t helped Connecticut. CNBC had us at 42nd in 2014, which is actually up from 49th in 2013. We’re in an older part of the country with aging roads, bridges, ports, and rail lines. We’ve also been hurt by population shifts out of the Northeast into the South and West, which makes it harder to increase federal funding, since a lot of federal transportation dollars follow population. So we have to be smart about how to prioritize new projects to make the best use of the dollars we do have.
CBIA News: There have been many reports about what other states are doing to improve their economic competitiveness and place in the national rankings, including reforming their tax structures and state employee pension systems. Doesn’t that pose a problem for Connecticut?
Brennan: Absolutely. If we were operating in a vacuum and only had to worry about improving ourselves, that would be one thing, but everyone else is not static. When you look at how aggressively other states are strengthening their business climates, it makes it harder for us to move up in the rankings.
CBIA News: Connecticut’s lackluster economic performance since the recession probably hasn’t helped either.
Brennan: No, but we’re beginning to see some progress on the job front. However, our slow economic growth has hurt our rankings, and it creates a vicious cycle: Because we have poor economic numbers, we get a low ranking, which in turn creates a barrier to growing the economy. So we need to break that cycle.
Following the opening of the General Assembly session at the State Capitol last February, CBIA’s Joe Brennan answers reporters’ questions about the business community’s legislative agenda for 2014.
CBIA News: What role do fiscal issues play?
Brennan: One thing that we continually hear from our members is that while there are no guarantees, they do look for some level of tax predictability when they’re making planning decisions. Companies make investment decisions based on long-term rather than short-term projections for a return on those investments. So, cycles of deficits followed by tax increases introduce unpredictability and have a chilling effect on investment.
The same is true when it comes to our long-term obligations. Although our long-term debt has been reduced somewhat, Connecticut’s unfunded liabilities are an enormous cloud hanging over the state.
CBIA News: Has the state moved to turn things around?
Brennan: There has been some progress in the past few years. For example, we’ve seen more lean training in state agencies, and several agencies have many fewer people than they did a few years ago. So we’ve seen some positive movement, but we really need to be aggressive in finding other ways to streamline, lean out processes, and make delivery of services more efficient and cost-effective if we’re going to solve our fiscal problems.
CBIA News: One of Connecticut’s historic strengths has been the quality of its workforce. Lately, however, employers—particularly manufacturers—have expressed concern about a growing talent shortage. What can be done to head off that problem?
Brennan: The good news is that there is almost universal understanding that talent development and retention is one of the most important issues facing employers right now. Better aligning education policies and job training programs with the needs of employers is a big part of the solution. Fortunately, we’ve begun to see greater collaboration between public and private education institutions and the business community—the Next Generation Connecticut initiative at UConn is a good example. Progress in this area needs to continue if we’re going to have a strong pipeline of talent available to Connecticut employers.
CBIA News: How does CT20x17 aim to push the state toward addressing all the challenges you’ve mentioned?
Brennan: The campaign is designed to look at all these issues and come up with specific policy recommendations, which if adopted by the state legislature and the governor’s administration, will have a positive effect on Connecticut’s business climate and—we hope—its place in the rankings.
Strategically speaking, CT20x17 aims to generate support for those recommendations not only by mobilizing the business community but also—and this is critical—reaching outside the business community to the general public and other types of organizations that understand that a lot of the problems that their clients, constituents, or members may have are largely driven by a lack of sustained economic growth over the last 20 years.
CBIA News: How do the interests of the business community and other constituencies overlap when it comes to the state’s economic competitiveness?
Brennan: It’s certainly not just a business issue, and the makeup of the CT20x17 campaign reflects that. The campaign is a broad coalition of people and organizations within and outside the business community. The Connecticut Community Providers Association, for example, is a CT20x17 partner—and their president and CEO, Morna Murray, is a member of the campaign steering committee—because they understand that a state economy not running at its peak harms the people their client organizations serve by not generating enough job opportunities for them or the tax revenue needed for essential state programs.
But if we can create more economic activity—have more cranes in the air and shovels in the ground—we can create that sustained growth that benefits businesses, their employees, jobseekers, people who want to move into or up through the middle class, young people who are looking to begin a career and buy a home in Connecticut, and organizations that rely on tax dollars to support their missions. All would gain from greater economic activity.
So economic competitiveness really has to be understood as something that benefits everybody.
CBIA News: Why isn’t that always the case?
Brennan: Often at the legislature, the economy is looked at as a zero sum game—if one side wins, another side loses—or we fight over how to divide up the economic pie instead of talking about how we can grow that pie and make it a win-win. I truly believe that we can do that.
If we look at things in a bipartisan way and try to take the best ideas from all sides to fashion policy choices, we’ll make Connecticut into what I believe can be a destination state. Right now, we’re not a destination state for most businesses. They’re here because they’ve been here. But I think we can become a destination state for innovation, for technology, for knowledge-based businesses, and for people of all ages who want to live in a state with a great quality of life that has a growing, thriving economy.
CBIA News: The 2015 General Assembly session began on Jan. 7. What’s your outlook this year?
Brennan: It’s always exciting going into a session after an election, particularly this year, because we have 33 new legislators. That’s a lot, and it adds vitality. It’s always good to have new ideas, new perspectives.
We also have some changes in leadership in both Republican caucuses and the Senate Democratic caucus. Three of the top four leaders will be new to their job. That’s always an opportunity to accomplish good things.
So, although we face some pretty serious challenges, particularly on the fiscal policy side, I’m optimistic. There was so much discussion during election season about Connecticut’s economic condition and so much concern expressed by voters through polls, surveys, and other means about jobs and the economy—it commanded a lot of attention from candidates at all levels. As a result, we hope there will be a singular focus on improving Connecticut’s economic standing so we can be more competitive nationally and globally and accelerate job creation.
CBIA News: How does CBIA prepare for a new session?
Brennan: Because we have such a tremendous membership base, we work hard to make sure that legislators know the businesses in their districts and spend as much time as possible with them. So even before the election, we set up more than 70 candidate meetings at member companies all over the state.
Immediately after the election, we began setting up meetings with new legislators at member locations so that we could talk about issues that are important to our members.
Beyond that, we work through our member councils to develop our public policy agendas, which are ultimately approved by our board of directors. We’ll also do public awareness advertising around key issues and hold meetings to go through our entire legislative agenda with all lawmakers, including the leaders and committee chairs. In addition, we hold a series of meetings with the media, whether it’s editorial board visits or sitting down for issue briefings with reporters, to make sure that we get our message out.
CBIA News: What do you like best about working at CBIA?
Brennan: The interaction with our members and our staff and knowing that what we do is so important to our members and the people of our state.
Being able to work with policymakers who understand what we’re trying to do is also very gratifying. We’ve developed very good relationships at the Capitol because of our credibility with policymakers. It all adds up to a really rewarding experience.
In addition, working with our board of directors has been a great experience. We get top people from around the state, and we have great participation from our board members. They are a huge help in setting policy direction for the organization, and collaborating with them has been a real pleasure. ■