Saturday, February 24, 2018

Connecticut's Department of Economic and Community Development Failures

Connecticut has a massive amount of economic problems.  One of the biggest problems it has is its poor economic environment for business and industry.  A great deal of business and industry has moved out of the state since the state income tax was enacted. More businesses have moved out since Connecticut has one of the worse infrastructures in the country, highest workers compensation costs in the country, regressive anti business worker laws that include a high minimum wage along with ridiculous labor laws that in many cases entrap the remaining businesses in the state.  I will also point out that Connecticut also has one of the highest Unemployment Compensation taxes that it charges its businesses along with having one of the highest unemployment rates in the region at 4.5% compared to the national average of 3.9%.  Connecticut still has yet to come out of its recession if it is compared to the other New England states especially when looking at Massachusetts and its unemployment rate of 3.7%.
Connecticut has a Department of Economic and Community Development (DECD) that using taxpayer funded state bonds along with taxpayers monies budgeted to supposedly invest in existing Connecticut business and attract new businesses to the state to help create jobs and tax revenues.  If one examines the DECD public annual report they would shocked to see how much is being spent with in my opinion poor results as far as job creation.  Their annual report is one of the most complex pieces of economic literature that I have tried to read in a long time.  For Fiscal year 2016-17 the state allocated a mere $382,704,969.99 to their budget.  Some of the companies that have received credits and taxpayers monies include Bob's Furniture Stores, ESPN and Irish airline Aer Lingus.
In the last information I could find on the finances of Bob's Furniture Stores who is owned by Bain Capital (Bain manages $75 billion dollars worth of businesses worldwide) their sales were somewhere between $900,000,000 to $1,000,000,000 nationwide.  The DECD awarded Bob's a $11,000,000 Urban and Industrial site Reinvestment Tax Credit in 2016.  I can not figure out what type and or how many jobs may have been created for this $11,000,000.   Lowes Home Centers  have received $15,944,575 in credits since 2004.  ESPN (who is laying off many employees) has received $10,000,000. in credits since 2014. 
All of this data in credits can be obtained from the DECD annual report
Thus we live in a state that no matter what cost per job is the state will pay it.  One could also argue that the state has wasted an enormous amount of taxpayer's monies paying out these amounts and it really has done little to stimulate Connecticut's economy.
This week brought news that Connecticut Taxpayers's will subsidize Irish airline Aer Lingus a mere $4.5 million dollars for flying out of Bradley Airport since their target passenger goals were not met according to their agreement with the state.  Irish airline Aer Lingus has revenues of $1.86 billion euros and saw a 15% increase in their profits by $269 million euros last year.
I wonder if there is any oversight to the failures of Connecticut's Department of Economic and Community Development.  For example the individuals who negotiated the Aer Lingus deal?  Why isn't Commissioner Catherine Smith held accountable for any of this?  After all she earned in salaries and fringe benefits in the last fiscal year $213,340.40.  according to the CT Transparency website.
Connecticut state government really does not get much right does it?  And as usual Connecticut Taxpayers pay the bill for this corporate welfare.  Remember that next time you watch ESPN, buy furniture at Bob's or fly Aer Lingus.

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