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Ready To Rumble
Rowland touts tax relief for hospitals, manufacturers and
a place at the table for Connecticut cities
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Business New Haven
2/21/2000
By: BNH
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On February 7 BNH spoke to Gov. John
G. Rowland, who may be coming off a tough 1999 (the New England Patriots, Adriaen's Landing, former Treasurer Paul Silvester) but who, as the new legislative session was about to unfold, was rested and ready to rumble.
What are your top three or four legislative priorities heading into the new session, particularly pertaining to business and economic development?
One, of course, is the budget; we're going to be making some budget adjustments. One, of course, is the seven-cents [per gallon] gas-tax cut [to take effect] April 1. We're also going to eliminate the gross-receipts tax on hospitals, which will save hospitals $75 million this year, [beginning] on April 1. That will mean big savings to hospitals that are suffering greatly. Yale-New Haven, for example, and many of our urban hospitals are in real bad shape due mostly to federal cutbacks [because] they balanced the federal budget on the backs of our teaching hospitals. The third business issue will be the manufacturers tax cut: We're going to go to single apportionment, which will save manufacturers tens of millions of dollars.
What exactly does that mean?
Right now they can apportion their income based on property, income or sales; by going to single apportionment, it gives the manufacturers a tax break of about $15 million, I think. The financial fields already have this kind of apportionment.
How about urban issues?
Changes that have to take place here in Hartford [to accommodate] Adriaen's Landing will be big; and we'll be continuing our commitment to education by building more schools in all of our cities and towns [$425 million proposed for new schools in Rowland's 2000 budget], as well as maintaining our commitment to UConn and the other public universities.
Speaking of urban issues, what about the Long Wharf mall? Following the Hartford Courant article two weeks ago, the developer [the Newton, Mass.-based New England Development] said that if they didn't get the required permits and release of state money by May, they were not going forward. Will they get them?
Our economic-development folks have been working 24 hours a day to try to get all the paperwork done. Unfortunately, [New Haven] mayor [John DeStefano Jr.] held up a great amount of the economic-development information that we needed early on; it took forever to get that from him. We finally got that and were able to move ahead. We're now doing the economic-impact study, and we've internally committed to try to get that done in 60 days.
Sixty days from a couple of
weeks ago?
Right.
One of the assertions of the Courant article was that this whole thing was ramrodded through the legislature without adequate oversight or debate. In your view, was that just spin [on the part of mall opponents]?
Sure. I have January 22's Courant article in front of me now: 'Shortcuts on Road to Mall: Critics, Politics, Campaign Money'...It basically says that all politicians are crooks, and we can't possibly be in favor of urban renewal and revitalization. Then, of course, in the New Haven Register the very next day: 'Mall Ruling Is Delayed.' So you've got the Courant accusing us of shortcuts, and you've got the New Haven Register accusing us of delaying the project. The reality is probably somewhere in-between: We're doing the best we can to fulfill our legislative obligation to supporting the mall, and having to go through all the legal requirements that have been created. Make no mistake: The opponents of this have done a great job of stirring [opposition] up and slowing it down. When it comes to government [-sponsored] economic development, it's easier to stop something from happening than it is to make something happen.
Assuming the traffic and environmental permits are forthcoming, is the project still on track politically?
If the question is whether we see any legislative attempts to kill this or trip it up, then the answer is no.
Connecticut Mastery Test scores were released last week, and despite some improvements in urban test scores, we were once again treated to a lot of spin about why city kids just can't do well on the tests. Are we expecting too little of these kids?
Performance, or expectations?
Both.
I think you should keep expectations and performance at the highest level possible. Kids will perform if you raise the bar high enough. If you keep the bar low, then they're going to scoot under it. We've done a lot better in Connecticut: Our fourth- and fifth-graders are No. 1 in math [nationwide], they're No. 1 in reading and they're No. 1 in writing. So we've made a lot of progress on the basics. But there's always the separation between performance in urban and suburban areas, and we try to address that with early-reading programs and before- and after-school programs, mentoring programs, summer school, getting rid of social promotion...
We haven't heard much lately about charter schools. Has this become a back-burner issue?
They're doing very well. In fact, we'll be increasing funding for some of the charter schools from about $6,500 [annually] per student to about $7,000 per student. That will be in my budget this year. We've had some that have failed, but for the most part they're doing well. We need to get more kids involved in them.
Yale has committed some $500 million to its science programs, specifically buildings, new programs and faculty. Will that change the economic landscape of the state?
That is the economic landscape of the state - science, engineering, information technology, manufacturing technology. For the last 100 years, we led the industrial revolution; for the next 100 years we have to lead the technology revolution. That means investments in science and engineering. That means the scholarships we're going to be promoting to get young people to enter these professions - and [enter them] here in Connecticut. We have a lot of natural assets: pharmaceutical companies, biomedical facilities, up at UConn in Farmington we've put $40 million into an R&D and biomedical research facility. If you look at the whole science and engineering field, there are going to be extraordinary opportunities in the state. And that's a field we ought to be steering our kids into, because that is the future.
So why not put a UConn engineering school in Hartford, and build the Connecticut Institute of Technology? Wouldn't that have greater long-term impact than something like Adriaen's Landing?
I'd like to put something like that in Waterbury [laughs].
The mantra of the last decade has been that regions can't be strong without vigorous central cities. The experience of places like Orange, Wallingford, West Hartford, seems to disprove this. Your opinion?
I would think of it in a different way: We have a window of opportunity now in our economy that offers us the best opportunity we've ever had to revitalize our cities. If we can't do it now, we'll never be able to do it. What is the greatest challenge for companies right now? Finding skilled workers, and even unskilled workers. They're saturated in Stamford. They're saturated in the suburban communities. If [companies] want to find low real-estate costs, good public transportation, a fairly productive, willing workforce - they should go into the cities. When we compare our cities to Boston and New York, our [real estate] values are extraordinary. You're going to see more and more developers buying property in Hartford, Bridgeport, Waterbury and New Haven because they know that's going to be the future for the next 25 years. And you're going to find more companies moving back to the cities. The hard part for us is to make sure that the educational capabilities are there: People aren't going to move into the cities unless they have good school systems.
Most people would be happy to have a seven-cent cut in the gas tax. Does that mean you've given up on eliminating the [state] income tax?
We've cut the income tax by about $700 per working family over the last five years. We also have a property-tax credit that's going up to $500 this year. We've cut the corporation tax down to 7.25 percent, which is the lowest it's been in modern history. We're phasing out the inheritance tax; we're probably going to phase out the gift tax; we've cut the gas tax by seven cents in the last five years, and we'll probably cut it by another seven cents [this year]. We've [returned] hundreds of millions of dollars in tax rebates, actually giving money back to people. We've been able to cut taxes by almost $2 billion in the last five years.
Is the legislative support there for a seven-cent gas tax cut?
I think so. We have the second-highest gas tax in the country. In the border towns, people are crossing the lines to fill up with gas and buy their groceries. We're losing revenue, and if we cut that gas tax I'll bet our revenue goes up because more and more people will stay in state. People will drive anywhere to save money on taxes; it's human nature.
Might there be role for you in a George W. Bush administration?
I'm staying right here where I'm happy. And I'm glad you think that George W. is going to win. But I'm going to finish this term and keep focused on our agenda; I'm going to stay here and get the job done. [So] any consideration for a Bush or McCain administration would have to be long after I'm out of here.
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