All you have to do is see GE’s recent advertising campaign to know why it decided to move to Boston. It features a sort of nerdy-looking guy trying to explain to his friends what he would be doing in his new job at GE. The kid is going to write the computer code that would allow GE’s machines and computers to “talk” to each other. He’ll make trains and hospitals more efficient. His friends don’t get it, his parents don’t get it and he tries in vain to explain that he will be working in high tech, at GE.
GE is trying to become a hip, almost start-up-type company where it’s cool to work. It’s not about Connecticut’s tax policy. The company is moving because Boston is where it’s at. And in Boston, the Seaport District is where it at. That where GE is heading. It’s not you, Connecticut. It’s us. Sorry, but you just can’t hang anymore.
Massachusetts Gov. Charlie Baker, a Republican and Boston Mayor Marty Walsh, a Democrat are far and away the big winners here. Both are dynamic leaders with sky-high approval ratings. The people love them and this GE coup will only add to that. They Bay State rock stars.
In Connecticut, the move will have repercussions in this and the next election cycle. Every state legislative seat is up for grabs this year. Incumbent Democrats would be wise to start devising a strategy to explain why they voted for a budget that unraveled like my Powerball dreams.
Republicans will do their best to hang the unsavory budget around the Democrats’ collective neck in November. It will be the crucial issue. They’ll use the GE exit as an example of how Democrats have squandered chances to build the economy rather than collect taxes in a biblical way.
Perhaps Connecticut Gov. Dannel Malloy was hoping GE CEO Jeffrey Immelt was pulling a Steve Harvey when he made the announcement. I’m not sure why Malloy tried to pivot and make GE’s impending departure about the need for his transportation plan. That could have waited. No one in the Nutmeg State wanted to hear excuses; not yesterday.
GE’s exodus is not about Connecticut tax policy so let’s get past that. The company effectively paid no state taxes. Social media abounded yesterday with comments from Connecticut folks and sadly even state legislators that it’s no big deal, the company was getting a tax-free ride in the state anyway. That’s incredibly shortsighted and represents everything that is wrong with the thinking of the majority of state legislators.
It’s not about how much in taxes the company paid or didn’t pay. It’s not about GE executives on their yachts. It’s about the 800 people who worked at the company’s headquarters. What do we think will happen to the local economy when the average GE employee no longer goes to the restaurants, dry cleaners or car dealerships in the area?
Immelt’s announcement said it all. “Today, GE is a $130 billion high-tech global industrial company, one that is leading the digital transformation of industry. We want to be at the center of an ecosystem that shares our aspirations. Greater Boston is home to 55 colleges and universities. Massachusetts spends more on research and development than any other region in the world, and Boston attracts a diverse, technologically-fluent workforce focused on solving challenges for the world. We are excited to bring our headquarters to this dynamic and creative city.”