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It’s Time to Take a Modern Look at Municipal Economic Development

The possibilities are indeed there to grow Connecticut’s economy in new, modern and smart ways. If municipal leaders approach it strategically, there is no doubt we can see more success in the future.

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The possibilities are indeed there to grow Connecticut’s economy in new, modern and smart ways. If municipal leaders approach it strategically, there is no doubt we can see more success in the future.

More and more, as local budgets have been stretched by a tight economy that continues to grip the state, having a smart and strategic policy of economic development at the local level has helped to fill the gap, and has become even more important. But even with that in mind, cities and towns must be focused on changing economic development trends of recent years; simply put, the landscape of business growth has changed, and initiatives that may have made the most sense a decade ago have given way to other priorities.

Connecticut has been ruled for decades by the insurance and financial sector, and those industries are still vital, but much of the new growth is coming from far less conventional areas. Instead, the big growth industries of recent years have been in durable goods manufacturing and information industries; this includes publishing, motion picture and sound recording, broadcasting, data processing and other information services. Also of note has been the burgeoning brewery industry, which has an increasingly large and loyal following and many members of which took home a number of awards in the 2018 “Celebrate CT!” event, which honors economic development success throughout the state.

Conversely, while businesses in these areas have bloomed, our venerable insurance and financial sector actually shrank a bit during a three-month period in 2018. So it is up to cities and towns to be aware of these trends, and of what will work best in terms of smart, reliable and sustainable economic development growth.

In Connecticut, recently unveiled high-tech projects like the $1 billion Energy Innovation Park in New Britain—a high-speed data center expected to bring good jobs to the city—have indicated a welcome change in direction for the state. Economists in the past have lamented our state’s inability to recognize the importance of information technology—and the physical network needed to support it—in growing and enhancing the economy. Projects like this could indicate Connecticut is finally getting serious about investing in modern, information-age infrastructure, and that is a critically important step when it comes to promoting business growth.

But none of this can or should be done in a scattershot way; strategic planning with thoughtful objectives must remain at the core. The Government Finance Officers’ Association, which represents public finance officials throughout the United States and Canada, has issued a Best Practices advisory, which recommends jurisdictions (such as cities and towns) create policies that establish appropriate parameters for economic development incentives. The GFOA suggests incentive policies need to be specific enough to establish clear boundaries, but to also allow for flexibility to ensure the right fit. The recommendation states, “As such, a policy should avoid specific details for assessing project proposals but rather focus on broader decision-making criteria and processes.” Those are wise words from people who understand how to best develop local economies.

Of course, at the heart of solid economic development, there has to be communities that are well-rounded and appealing. This means an array of cultural activities, entertainment and restaurants. It means modern transportation infrastructure, as well as well-maintained roads and bridges. And yes, it means livable and workable communities where people want to be. The good news for Connecticut on this front is we are among the nation’s leaders in communities of this kind, as often times the number one reason people give for staying here is the high quality of life.

The possibilities are indeed there to grow Connecticut’s economy in new, modern and smart ways. If municipal leaders approach it strategically, there is no doubt we can see more success in the future.

Vanessa Rossitto, CPA, is a partner at blumshapiro who leads the firm’s Government practice. blumshapiro is the largest regional business advisory firm based in New England, with offices in Connecticut, Massachusetts and Rhode Island. The firm, with a team of over 450, offers a diversity of services, which include auditing, accounting, tax and business advisory services. blum serves a wide range of privately held companies, government, education and non-profit organizations and provides non-audit services for publicly traded companies. To learn more visit us at blumshapiro.com.

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