Democratic gubernatorial candidate John DeStefano today teed off on Gov. M. Jodi Rell’s economic development record, calling for a new public/private partnership that would award cash bonuses to companies who create jobs with health insurance, after the businesses create them. Rell’s campaign spokesman pointed to business tax credit ideas she announced in her recent budget address as a way to help the jobs situation.
“I think the state of Connecticut’s job is to not be the bank for companies that are performing poorly,” DeStefano said. The state often puts economic development funding into shrinking companies in industries that do not provide quality jobs, he said, instead of prudently rewarding those companies that have a proven track record. “What we tend to do is make bets, like on a craps table, we tend to make a bet and hope to pick the right one,” DeStefano said.His plan would reward companies in targeted industries that meet a set of criteria (eg. pay at least 50 percent of an employee’s health insurance premium, have a central administrative office in state) by paying 5 percent of that company’s newly created payroll. That makes it revenue neutral, DeStefano claimed, because the state would be benefitting from extra income tax paid by this new employee. At least 75 percent of the company’s sales would have to go out of state, in order to make sure the program benefits businesses that wouldn’t have just come to Connecticut regardless. And the company wouldn’t receive the money until after it created the jobs.The plan is nearly identical to Oklahoma’s Quality Jobs Program, which was first launched in 1993 and has been hailed as an unqualified success. Not only does the program help lure out-of-state businesses that wouldn’t have normally relocated, but more than 60 percent of the economic activity comes from instate companies, according to Jonna Kirschner, general counsel for Oklahoma’s Commerce Department.“We’re looking at this as encouraging existing companies,” Kirschner said. Since its inception in 1993, Oklahoma’s program has created an additional 73,000 jobs, according to a 2004 study completed by university economists for that state’s Chamber of Commerce. “The Quality Jobs program appears to have made important contributions to Oklahoma’s employment base, beyond what would have occurred naturally,” the study said. Rell campaign spokesman Rich Harris defended the governor’s record on economic development, saying the state’s economy is strong and claiming 24,000 new jobs on her watch. The governor proposed targeted job creation tax credits and displaced worker tax credits that would aid laid off employees, along with an overhaul of the Department of Economic and Community Development.“A company that creates 50 or more new jobs will be eligible for a tax credit based on the withholding tax paid by the new employees,” Rell said in her budget address.