TRUMBULL, CT (October 29, 2018) – Rich Deecken, the Republican candidate for the State Senate in the 22nd District, issued the following statement concerning the current state policy of corporate tax incentives.
For the last eight years, Governor Malloy’s First Five Job Creation Initiative has been the cornerstone of Connecticut’s economic development strategy. Seventeen companies and a recent number 18, Infosys of Hartford, have availed themselves to the Governor’s program.
Infosys was approved for a $14 million grant from the State Bond Commission in April. Seven of the 18 companies are based or have an office in Stamford, five of these companies are based or have an office in the Greater Hartford area, and three of these companies are or were based in the Greater New Haven area, including the recently re-located Alexion Pharmaceuticals.
The State Department of Economic and Community Development is currently in the process of recovering the $20 million loan and $6 million grant from Alexion. Care to take a guess how many First Five Companies re-located to Greater Bridgeport within the last eight years? Zero.
$160 million in corporate tax credits to businesses outside of Greater Bridgeport, $321 million in direct state assistance outside of Greater Bridgeport, $222 million in forgivable loans outside of Greater Bridgeport, and $100 million in state grants that our region did not receive. When the governor preached his doctrine of fairness back in February, he forgot about his eight-year record of First Five neglect in Greater Bridgeport.
First Five was intended to attract new businesses into the state and keep existing companies and jobs that encourage business growth. Despite the Governor’s tax incentives, some businesses have decided to leave, like Alexion in New Haven and General Electric in Fairfield. The reasons for the exodus are varied, from high cost of living, tax increases, and unstable state finances, to college graduates relocating to dynamic cities in neighboring states and beyond. The result: Connecticut’s population continues to decline as residents move to other states.
By picking winners under the First Five program, the Governor fails to grasp the “unfair” and uncompetitive environment that is driving residents and companies beyond the border of Connecticut. Economist John Beck summarized the problem with tax incentives best by stating, “Selective tax abatement raises questions of fairness, since uniform treatment under the law is a fundamental principle of justice that selective abatement contradicts.” Tax incentives, in other words, exist only for short-term opportunists and are not conducive to sustained economic stability.
In contrast, a stable, consistent tax rate benefits all. Rather than entrusting lobbyists and bureaucrats to decide Connecticut’s next business success with special tax breaks and subsidies, it is time to level the playing field and adopt a friendlier, predictable environment in which businesses are free to compete and thrive on their own. Greater Bridgeport has been neglected for years by Governor Malloy, who is more interested in choosing winners and losers than in attaining long-term prosperity. The next governor and state legislature must put an end to this failed policy that was designed to aid cronies and insiders at the expense of the public and greater business community.