GE and the corporate headquarters sweepstakes

Let the games begin! General Electric is considering offers from other states, including New York, to move its Fairfield headquarters and other jobs out of Connecticut. Gov. Dannel P. Malloy says he’s been in talks with GE about staying. Either way it comes out, GE wins and we lose.

Let’s start with the obvious: losing GE and the high-paying jobs at its headquarters would be, if not an utter calamity, fairly bad for Connecticut. The town of Fairfield would feel the loss sharply, as would Plainville if GE’s new manufacturing center there also departed. The sort of jobs and income GE represents are very hard to come by, and it’s not likely they’d be replaced easily or quickly.

And there is, as a Courant editorial noted, prestige in having the headquarters of a global corporation like GE here in Connecticut — it makes us feel like less of a loser, like we really can compete in the marketplace despite everything that’s happened in the last few decades to our corporate and manufacturing base.

All of this is theoretically because Connecticut implemented what’s called unitary reporting for tax income as well as a wide range of tax hikes in its latest budget. Any bid to keep them here would likely involve rolling some of that back or building some exclusions in at the very least.

This sounds familiar. There’s a lot of competition between states and cities for the increasingly scarce kinds of jobs GE represents, and companies like GE, Aetna, and others are well aware of it. That’s part of the reason why GE only pays a miserly $250 in state taxes right now, and it’s why Gov. Malloy was willing to throw millions at established large companies like ESPN, NBC and CIGNA as part of his “First Five” job creation package.

After all, there’s always the danger that a low-tax state like Texas or Georgia could lure those companies away with promises of a better deal, and we want to make it worthwhile for them to stay here.

It feels almost like how sports franchises pit cities against one another to get tax breaks, new stadiums, renovations and more revenue. In the late 1990s the New England Patriots were fairly dissatisfied with their stadium in Foxborough, Mass., and so announced that they were moving … here. A starryeyed legislature voted to give them money by the wheelbarrow and a beautiful new stadium in Hartford right next to the river. Gov. John G. Rowland, who everyone blamed for losing the Whalers, was suddenly a hero.

That didn’t last. The deal fell through, and the Patriots got a new stadium in Foxborough out of it — which was almost certainly what they’d wanted all along.

There’s a lesson here. If a big, powerful company wants something from the government, they’ll do whatever it takes to get it, including threatening to go somewhere else. If a company desperately wants to go somewhere else, which was the case with the Whalers, nothing’s going to stop them.

Right now it feels like GE probably wants to stay, they just want the state to stop the tax hikes and forget about unitary reporting. That’s why they fired a shot over the legislature’s bow earlier this summer and have been flirting with other states.

So what should the governor do? Back down on tax hikes? Throw out unitary reporting? Drive a dump truck full of much-needed taxpayer money up to their door? What if we do nothing? Can we even do that? Should we dare? What would the worst case scenario be if GE left? Would it be worse than whatever awful compromise we had to make to keep them? I have no idea, but there must be a point of diminishing returns somewhere.

I’m sure that the governor will offer them something they want so they’ll stay, but I’m also sure that in another decade or so they’ll leave anyway because of something we can’t control, like salaries, cost of living, or climate. It’ll turn out it was never really about taxes.

That’s how the game is played.

But while they’re here, they’ll get the royal treatment, and their needs will be placed above schools, roads, social services, and everything else. We must grovel before giant corporations or they will take their toys and go, leaving nothing but ruin behind in the place that nurtured and catered to them for so long.

That’s life. There is no other way … Is there? Susan Bigelow is an awardwinning columnist and the founder of CT-Local-Politics. She lives in Enfield with her wife and their cats.