Originally Published Wednesday, Dec. 23
General Electric (GE) , which moved its headquarters from Manhattan to suburban Connecticut more than 40 years ago, may be returning to the state of New York, according to two Connecticut lawmakers.
A dispute over what GE executives characterize as an onerous tax increase, and the failure of the Democratic state government to make sufficient concessions on the plan mean there's a 90% chance GE will leave Connecticut, said State Sen. Toni Boucher, a Republican whose district includes the border towns of New Canaan and Ridgefield, the homes of CEO Jeffrey Immelt and CFO Jeff Bornstein, respectively.
Boucher sees a 50% chance of GE relocating to Westchester County in New York, which has the advantage of proximity for employees who may not want to give up their personal lives in Connecticut, and a 40% chance of the manufacturer moving to Boston.
"I would put my money that GE is not staying in town," said State Rep. Brenda Kupchik, a Republican state representative whose district includes Fairfield. "When we met with GE back in September, at their headquarters, they said they weren't happy with the taxes, and they said there was a systemic problem with the state of Connecticut's budgeting."
GE declined to comment beyond an e-mailed statement that its team was "taking many factors into consideration" and would communicate its final decision, once made, publicly.
A move would be yet another change to a piece of the manufacturer's identity, following a year that saw the acquisition of Alstom's power business, the largest deal in the company's history; the collapse of a second attempt to sell its appliance division; and the wind-down of much of its sprawling lending business.
It was just a day after Connecticut's legislature approved a budget plan with a $1.9 billion tax increase, in early June, that Immelt said he would form an exploratory committee to consider relocating. He urged employees to share concerns about Democratic Gov. Dannel Malloy's "significant and retroactive tax increases," which included a so-called unitary tax that effectively places a levy on corporations by altering how the government accounts for incomes earned outside of the state.
Other multinational corporations in Connecticut complained, too, including insurance giants The Hartford Group (HIG) , Travelers (TRV) , and Aetna (AET) , prompting the General Assembly to pare about $350 million in taxes from its 2016 budget during a special meeting on the state's deficit this month and $212 million in 2017. The increase in the unitary tax was capped at $2.5 million above the current level.
Boucher is concerned that wasn't nearly enough.