With major corporations threatening an unprecedented exodus from Connecticut earlier this year, a permanent Commission on Economic Competitiveness that started meeting last week will begin dissecting state tax policy and impediments to growth.

The state legislature created the commission, which includes former Groton Town Mayor Heather Bond Somers as the lone representative from southeastern Connecticut, in response to concerns about the effects of new taxes imposed this year on the business community. It will meet monthly.

“We need to keep reminding ourselves that Connecticut is a great place to do business, and that if we make better policy choices we can restore confidence and make our state stronger and more competitive,” Joe Brennan, a member of the commission and president of the Connecticut Business & Industry Association, said in a statement.

Brennan and others in the business community are concerned about years of lackluster growth in the state economy, which saw just a 0.6 percent improvement from last year. This compares with 1.6 percent growth throughout New England and 2.2 percent nationwide.

Connecticut this year was ranked No. 33 in the nation in CNBC’s annual Top States for Business scorecard, a big improvement from its No. 46 ranking last year, thanks largely to a new scoring method that put more weight on the efficiency of a state’s workforce. The survey also showed Connecticut’s deficits, ranking the state near the bottom in cost of living, infrastructure and cost of doing business.

“We’ve got challenges that are keeping us from getting the traction we need to be as successful as we should be,” Brennan said.

Among the commission's tasks, as directed by the legislature, will be to report on the latest budget’s tax impacts on businesses; study how businesses both big and small can stay competitive, and offer proposed laws or tax changes that would help the economy grow and industries to thrive.

Somers said her major goals for the commission would be to improve the regulatory environment, create a new tax structure for small businesses and establish a more stable state budget that relies on fewer gimmicks and retroactive fixes.

During the last legislative session, several large companies led by Aetna and General Electric balked at tax increases approved by the legislature, spurring Gov. Dannel Malloy to urge lawmakers to rescind some of the increases. But GE is said to still be considering a move out of state.

Don Klepper-Smith, former head of the Governor’s Council of Economic Advisors under Gov. M. Jodi Rell, applauded the idea of naming a permanent commission that would stay intact from one administration to the next. But he worried whether the panel would tackle issues head on or would turn into a smokescreen in which old policy prescriptions would be rewritten to look new.

"Economic development in the state has been somewhat backwards,” Klepper-Smith said in a phone interview. “Business confidence in Connecticut has taken a big hit.”

Klepper-Smith said the state must refocus attention from picking winners and losers by funding some businesses and not others and concentrate instead on developing a climate in which all enterprises can thrive. The state must also commit itself to greater fiscal restraint, he said, because 3 percent to 5 percent increases in the budget cannot be paid by a population more and more reliant on 1 percent to 2 percent increases in Social Security.

“That says the cost of government is outpacing our ability to pay for it,” he said.

CBIA's Brennan, in a phone interview, noted the commission will have only a few meetings before next year's short session of the legislature, so expectations for him this time around are that the panel can be a place where legislative proposals can be aired and, if hurtful to the business community, can be stopped before moving forward.

"I hope we can filter out things that would do the most damage," he said.

Longer term, he added, having a permanent commission working in a bipartisan manner could result in real reforms if the urgency to improve the business climate is kept in mind.

Brennan said he hopes "people have the desire to put differences aside to see what is in the best interests of the state as a whole."

l.howard@theday.com

Twitter: @KingstonLeeHow 

State Rep. William Tong, D-Stamford, co-chair

Joseph McGee, vice president, Business Council of Fairfield County, co-chair

DECD Commissioner Catherine Smith

DRS Commissioner Kevin Sullivan

Joe Brennan, president and CEO, CBIA

Steven Glazer, economics professor, Norwalk Community College

Jeffrey Hyde, senior state tax counsel, IBM.

Lori Pelletier, president, Connecticut AFL-CIO

Seth Harold Ruzi, vice president and associate counsel, Starwood Hotels and Resorts

Ellen Shemitz, executive director of Connecticut Voices for Children

Heather Somers, business owner and former GOP nominee for lieutenant governor

Rep. Cristin McCarthy Vahey, D-Fairfield

Rodney Williams, owner, Mr. Rock Drywall LLC

SOURCE: CBIA