NEW YORK (TheStreet) -- While Connecticut is backtracking on the most unpopular aspects of a state budget that included big tax hikes for businesses, it may be too late to keep General Electric (GE), not to mention several other major corporations.
GE formed a committee to explore relocating its headquarters from Fairfield, its home for the past 41 years, after the state legislature approved a so-called unitary tax this month that would not only have placed levies on income earned outside the state but would have been retroactive as well. The committee, which CEO Jeff Immelt said in a memo would seek a more business-friendly home, is continuing to look, GE said on Thursday.
Another loss may be New Jersey-based Bristol-Myers Squibb (BMY), which has about 900 employees in the Nutmeg State. Bristol-Myers recently announced it's moving the bulk of its operations out of Wallingford, where it has had a site since 1986, and into neighboring Massachusetts. The move was based on the company's strategy of putting scientists closer to centers of innovation and business opportunity, Bristol-Myers spokesman Frederick Egenolf said in an e-mail.
Insurance giants Aetna (AET), Travelers (TRV), and The Hartford Group (HIG), meanwhile, openly chafed at new taxes. But a proposed cut to 1% percent on the data-processing and Web service tax, which was set at 3% after a rate of as much as 6% was discussed, has restored some confidence in Gov. Dannel Malloy's willingness to work with businesses, though the changes would still have to be approved by the state's legislature.
"We are pleased that the governor has listened to the concerns expressed by the business community and has proposed changes to the budget," Travelers spokesman Patrick Linehan said in an email. "We will closely monitor the legislature's reaction to these proposed changes. We care deeply about the state of Connecticut and are committed to ensuring that it continues to be a top-quality place to live and work."
Hartford also welcomed Malloy's decision on the data-processing tax and urged the legislature to follow suit. "Data is essential for all companies, large and small," spokesman Thomas Hambrick said. "The elimination of the tax increase will give our small and mid-sized business clients a better chance to grow and thrive in Connecticut."
The latest proposal to address GE's primary concern, the unitary tax, is to nix its retroactive aspects and make it effective for 2016 earnings, according to Patrick O'Neil, a spokesman for Republicans in the state House of Representatives.