In a highly competitive national and international economy, Connecticut is not a low-cost state. But it has leveled the playing field through incentives such as its unique R&D tax credit and its sales and use tax exemption on certain equipment, an exemption extremely important to the biopharma industry.

As a result, venture capital and other investment has flowed into the state (see the latest MoneyTree® report in this issue), funding high-paying research and manufacturing jobs that have a multiplier effect as spending spreads through the local economy.

Unfortunately, these highly successful programs have come under attack as Connecticut contemplates its ever-growing budget gap. Apparently there is a theory among some lawmakers that the best approach in tough times is a “share the pain” philosophy, under which even successful programs must give up their pound of flesh to make ends meet.

But, as the Connecticut Post points out in their April 28 editorial, effective government is about hard choices, not about treating every program the same. We were wise when we established our tax incentive programs, which are accomplishing the objectives for which they were designed. It would be counterproductive to turn now on the very companies that are investing the most in products, buildings, equipment, and people in our state.

Rather than pulling the plug on programs that work, lawmakers would do well to focus on improving efficiency in state government. That means not only trimming the expense of current governmental operations, but also avoiding unnecessary legislation that adds to the cost of state government as well as doing business in the state.

A case in point is a recent proposal to add layers of regulation and reporting aimed at controlling how pharmaceutical company representatives interact with doctors in the state regarding "gifts," lunches, and so on. As I argued recently on WNPR's Where We Live, these matters are already regulated under Federal law and through industry codes of ethical conduct. The additional expense to doctors, pharma companies, and the state of such reporting is not warranted, especially in these tough times. (Click here for full WNPR program (48 minutes streamed). Click here for just my remarks (mp3 file 4.6mb).

Drug discovery is a long and difficult process, but the pharma and biotech industries represent one of our state’s best hopes for economic progress. Gutting the tax incentives these businesses have relied on when investing in Connecticut, and treating companies like pariahs once they have a product to market, are not the messages we want to send. Let’s continue to encourage these valuable allies to take part in our future.

Paul R. Pescatello is President and CEO of CURE.