In Nebraska, Republican Gov. Dave Heineman enacted the biggest tax cut in state history, and the state's unemployment rate of 4.2 percent is now the second lowest in the nation.
In Connecticut, Democratic Gov. Dannel Malloy enacted the largest tax increase in state history this year, and the state's unemployment rate of 9.1 percent ranks in the bottom half in the nation.
Despite their different approaches on taxes, the two governors stood side by side at a Hartford hotel Tuesday at a news conference regarding the best ways for states to grow jobs.
Heineman, who chairs the National Governors Association, came to Hartford after Malloy agreed to host one of four regional economic summits that will stretch from Nashville to Omaha to Seattle.
The tax cuts, he said, allowed Nebraska to be ranked by the CNBC cable channel in the top 10 as a business-friendly state.
"It made a real difference in our tax-competitive climate, our business-friendly climate,'' Heineman said. "We know we need to do more. It's all of these things combined. It's not just one. It's taxes. It's regulation. It's workforce development. It's education.''
Since he took office in January, Malloy said, he has spent much of his time "straightening out the state's finances'' and balancing the budget. Part of that included increases in most of the state's taxes, including those on income, sales, and corporate profits.
"I believe we're moving in the right direction,'' Malloy said. "The reason I did what I did with respect to the budget was so that I could look business in the face and say, 'Listen, I believe we've got the bulk of our problem behind us. We've balanced a budget. We've taken the steps necessary to wrestle a structural deficit to the ground and we move forward.' ''
"I think we are a tax haven,'' Malloy told reporters. "Although our personal taxes may be high, primarily driven by our over-reliance on property taxes, if you look at our corporate tax structure, we have one of the lowest effective rates on the corporate level.''
Malloy, Heineman, and Gov. Jack Markell of Delaware were the three main participants in the National Governors Association summit. Heineman, who arranged the summits, said he made his first call to Malloy to schedule a conference in Connecticut. The conference includes about 10 panel discussions over two days at the Hilton Hotel in downtown Hartford with participants from all New England states.
Top economic development officials from Connecticut, including University of Connecticut board of trustees chairman Larry McHugh, MetroHartford Alliance CEO and former gubernatorial candidate Oz Griebel, CBIA chief John Rathgeber, General Assembly commerce committee co-chairman Jeffrey Berger of Waterbury, commerce ranking member L. Scott Frantz of Greenwich, and Malloy's budget chief, Ben Barnes, were in attendance.
Malloy was one of the early speakers in a truncated hotel ballroom to tell the story of the economic strengths of Connecticut.
"We write more life [insurance] policies than any other state in the nation,'' Malloy told the multi-state crowd. "If you're going to build a submarine or a jet engine, you're more likely to do it here than any other state in the nation.''
In an attempt to improve the state, Malloy says Connecticut needs to move more quickly in issuing permits to businesses. It also takes 18 to 24 months to approve a new academic major at the state colleges and universities, and the state needs a "much more rapid'' decision-making process, he said.
As they went around the table, speakers from Massachusetts, Maine, Rhode Island, New Hampshire, and Vermont all briefly talked about their states and how they are trying to reform regulations and cut red tape.
In Nebraska, Heineman said that the college professors at the University of Nebraska should be recruiting students in the same way that the coaches are recruiting athletes.
"That gets them a little excited when they think they might be held accountable,'' Heineman said of the professors.
In Nebraska, the state cut income, property and sales taxes during the seven years that Heineman has been governor. With 1.8 million residents, Nebraska has a population about half the size of Connecticut, but its state budget is far, far lower. Connecticut spends about $20 billion annually, while Nebraska spends about $3.5 billion. In addition, Nebraska has a unicameral legislature - meaning there are 49 state senators and no members of the state House of Representatives.
The two-day conference marked the first time in recent memory that three governors had appeared in Hartford at the same time. Rhode Island Gov. Lincoln Chafee was scheduled to attend, but a last-minute schedule change prevented his attendance.
Senate Republican leader John McKinney of Fairfield said he was stunned by the comments.
"So Governor Malloy thinks this is a tax haven? I had no idea,'' McKinney said. "I think the governor's comments that we're a tax haven shows that the governor doesn't get it. Maybe the multi-national large corporations are attracted by a lower corporate tax rate, but our economy is driven by small business owners. ... The way to tell business that you have your house in order is to get spending under control. He doesn't cut spending. He increases spending. I'm almost left speechless at the fact that here's the governor of Nebraska talking about cutting taxes and our governor is believing that increasing taxes improved our business climate. Every small business owner pays the personal taxes that Governor Malloy thinks are too high.''
He added, "To me, he's saying, 'I only care about big business that paid a corporate tax.' I'm very surprised by his comments. ... The governor's comments show a tin ear toward the real needs in our state - to let small businesses grow and get stronger.''
The next step is the special session on October 26 that focuses on jobs and the construction project proposed by the Jackson Laboratory at the University of Connecticut Health Center in Farmington. McKinney attended the celebratory press conference when Malloy announced the deal, but he is still asking for further details.
"I have not taken a position. I was there to thank the governor for getting us to that point,'' McKinney said. "You can't make a commitment until you have all the answers.''