Hot on the heels of recent news of General Electric (NYSE: GE) moving their headquarters to Boston, after decades in Connecticut, come murmurs of a possible move by another major employer Aetna (NYSE: AET). The state’s tax policy and spending plans have been under the scanner of late, as major businesses review their decision to base their operations out of the region.
Kentucky focus makes Connecticut jittery
Mark Bertolini, the CEO of health insurer Aetna, recently made a statement to investor analysts that the company intended to headquarter Medicare, Medicaid as well as other government insurance plans out of a new base in Louisville. The insurer has plans to buy Humana for USD 34 billion and Louisville has traditionally been their center of operations. He added that this was the only community where they have gone ahead to make a real estate commitment. In a separate discussion the week before, he had also indicated to the Chamber of Commerce of the Louisville area, that Aetna intended to look at all the real estate in the area, but has specifically committed only to Louisville.
Jobs in jeopardy?
While the company has not come out with any statements on plans to relocate from Hartford - the spokesperson even commented that they would remain headquartered in the town - there is enough cause for concern after GE’s exit from Fairfield in spite of a 42 year history.
Aetna has had its headquarters in Hartford, Connecticut for well over a century with early associations dating as far back as the 19th century. Today, the insurer employs approximately 6000 people at its locations in the state. For now, everyone remains tight lipped, with the Connecticut Department of Economic and Community Development spokesperson refusing to comment on efforts or deal to help retain Aetna and the jobs in the state.
Budget disputes and tax hikes driving businesses from state
Aetna had, along with GE and some other businesses in the state, opposed tax hikes proposed by the state administration. The proposed data processing tax was likely to have caused the annual state tax bill to go up by 27 percent - something businesses wouldn’t take lying down. Under tremendous pressure, lawmakers were forced to withdraw the plan.
The GE exit has also prompted others to weigh their options in the state and look for greener pastures. It has been widely acknowledged that the need of the hour is dialogue and for the state to listen to what companies need, because status quo just won’t cut it. As the General Assembly convenes for its first annual session this week, addressing these concerns for companies operating in the state, will be a top priority.