Bashing Connecticut is becoming a national sport. Media report after report bemoans our bad business climate, high tax rates, bloated government, lines at the motor vehicle department — the list is long.
I might suggest, respectfully, sheepishly and with some chagrin another opinion. Somehow, despite this malaise, the clients of our accounting business are doing well.
As accountants, we have a special vantage. Forget the cocktail party bluster, clients have few secrets from us. Most are having the best years, or series of years, in their histories. Bankers taking us out to lunch are hungry for business. They lament that their customers are so successful they have no particular banking needs — they can self-fund expansion. Their balance sheets are very strong. Defaults almost unheard of.
The solid results go right across industries: manufacturers, niche aerospace companies, distributors, auto dealers, professional services and even retail are prospering. Only home builders on our client list are languishing.
I do not think that our client list is unique. It might be good advertising to suggest that we have somehow added the secret sauce that has made this recent run of success possible — but I sense not.
The fact is Connecticut is not such a bad place to do business.
Sure, it would help if the individual tax rate were about 2 percent lower (more like Massachusetts). The new federal tax act will heighten the awareness of the state income tax and local property tax burden. As these taxes become largely non-deductible, Florida looks even better in 2018 than it did in 2017. The vestigial estate and gift tax raises little money and compels people to retire or die elsewhere. Regulation and state government is intrusive. One manufacturing client recently complained of the environmental people asking them to explain their white paper office and soda can disposal process (go figure).
But the positives are easily overlooked.
Connecticut has a wonderful workforce. People show up. There is a palpable New England work ethic. Skilled labor, while always in demand, is around. Transportation (sections of I-95 notwithstanding) works. Commutes (again leaving out parts of I-95 and New York out of it) are reasonable. Medical care is outstanding. Housing costs by New York City and Boston standards, modest. Educational opportunities abound. Business schools, law schools, medical schools as well as community colleges and adult education programs are disproportionately available for a small state. Want to go to law school at night in North Dakota, not so easy.
We also have the ocean and some good-sized hills (I will not say mountains). Ever try to go sailing in Iowa? (By the way, note to the legislature, drop the sales tax on boats, Rhode Island has none and, in case you have not noticed, it is next door.)
Of particular importance are the interlocking support services. Heat treating, laser welding, tool sharpening, IT support, gauge calibration, banking, HVAC, legal services (and, yes, accounting professionals) are on the web, local and will show up.
Ever try to hire a bookkeeper in Texas? We have; good luck. Ever try to find five CAD/CAM machinists in Montana? Not so easy. How about an Federal Aviation Administration certified welder? Or try to order a certain type of stainless steel in China (you are as likely to get aluminum foil as a specialty steel/molybdenum blend). Ever tried to find a plumber in Vermont?
Of particular interest to us are the excellence of the professional services available in Connecticut. The Connecticut bar is renowned. Banking, accounting, IT, money management, financial services, consulting are well represented. OK, if you want to take put your business through an initial public offering, you will probably go to a money center. But our clients are generally closely held and not going public just yet.
So, as we enter the New Year, let’s not trash Connecticut quite so much. If it is so bad, why is corporate Connecticut doing so well? Why is our per capita income one of the highest in the nation? Why are we and our clients having so much fun? Come on, lets approach 2018 with some pride and enthusiasm.
Robert Lally is a partner in Federman, Lally & Remis LLC an accounting firm in Farmington.