Aetna, along with other major companies in Connecticut, is reconsidering continuing major operations in the state.
Democratic legislators appear to be rethinking their final budget plans, after General Electric and Aetna both said they would consider leaving Connecticut if new taxes are instituted. Insurer Travelers also blasted the plans.
It’s rare for a company of GE’s size to get involved in a state level budget fight, but the corporation is headquartered in Fairfield, and between its various divisions has 5,700 workers in the state. It would be affected by a plan to institute a new "unitary" tax on corporations that do business in several states.
In a statement issued Monday, the corporation said "retroactively raising taxes again on Connecticut’s residents, businesses and services makes businesses, including our own, seriously consider whether it makes any sense to continue to be located in this state."
Following GE's lead, health insurer Aetna said Monday, "we strongly believe this will undermine the competitiveness of Connecticut-based businesses and will lead to an exodus of jobs and business from the state. Such an action will result in Aetna looking to reconsider the viability of continuing major operations in the state.''
Travelers didn't issue a threat to leave, but it did raise its own objections to the budget bill, issuing a statement that said, "raising taxes again will increase the cost of living for nearly every resident and small business in the state, negatively impacting our employees and customers. Lawmakers should explore other solutions to the state's budget to help keep Connecticut competitive and make it a desirable place to live and work.''
Meanwhile, other businesses are rather happy with the compromise that had emerged in talks between the governor’s office and senior legislators over the weekend. The original proposal would have extended the sales tax to a new raft of services, such as veterinary care and accounting; that was scaled back to include only computer and data services.
Dr. Arnold Goldman has a veterinary practice in Kent. "We’re certainly pleased that the legislature has found another way to deal with the revenue issues of the state," he said, "and that they didn’t choose to burden a form of healthcare that for at least 60 percent of the population is very important."
The CBIA meanwhile called on legislators to reject the budget deal, saying the outcry from corporations was unprecedented.
Facing this kind of pressure, House Speaker Brendan Sharkey said late in the day that changes have been made to the package, although he didn’t reveal the details.
But Governor Dannel Malloy seemed unmoved by the corporate threats.
"Businesses, residents and the Connecticut economy lose billions — billions — of dollars of output each year because our transportation infrastructure needs a transformation, which this budget delivers,” said a spokesman for the Governor's office. “The historic investments we’re making, the largest in the history of Connecticut — an additional $10 billion — are good for job creation, good for the economy, and good for businesses, GE included.
