More than half of Connecticut manufacturers have been invited to move their business to another state, a Monday report entitled the Connecticut Manufacturing Industry Survey found.
Of the 211 manufacturers surveyed, 52 percent stated they had been “recruited to relocate or expand to other states.” Even more worrisome, 86 percent surveyed stated that economic conditions in the state were “fair” or “poor”. No manufacturing firm chose the “excellent” rating.
These facts are not surprising; states frequently attempt to poach jobs from one another, and Connecticut residents surely realize we are in tough economic times. However, the survey revealed several other important pieces of information regarding our state’s economic outlook.
The first is the fact that, although many of the courted firms are still in Connecticut, they do not stay due to any misguided government economic incentive package or because Connecticut is a business-friendly state. Rather, they stay for reasons far beyond the control of Hartford economic planners.
For instance, the most cited reason for keeping a business in Connecticut was the fact that the owners had family in the state. A close second was pure nostalgia, with 21 percent staying because their company was started in Connecticut. Only one respondent claimed to keep their business in-state due to the quality of life.
At the same time, when firms were asked why they have considered relocating to another state the most common response was due to government attitudes towards their business; a quarter of respondents cited governmental interference as a deterrent. Another 16 percent cited the state’s tax structure.
Clearly, then, Connecticut policies are driving businesses out. But what are other states doing that is inviting them in?
The answer to this question can be seen in the five most popular states considered for manufacturing relocation. In order, these states are South Carolina, North Carolina, Florida, Texas, and Virginia.
The appeal of these states could be due to the fact that all are right-to-work states, lowering unnecessary worker costs. Connecticut, on the other hand, has forced unionization in many industries, with constant reminders of how inefficient such a system is.
Or, the appeal of these states could be due to their low tax burdens. While Connecticut boasts a 12.3 percent burden, North Carolina, Florida, and Virginia have burdens in the 9’s. South Carolina has an 8.4 percent burden, and Texas boasts one of the lowest tax burdens in the nation at 7.9 percent.
Regardless of the appeal of other states, however, one thing is certain: the appeal of Connecticut, if there is an appeal, is not the crony capitalist Small Business Express Program, nor the high tax burden, nor meddling government policies. If one thing should be taken from this report, it is the fact that less government undeniably equals more business.