When all the proposals lawmakers and Gov. Dannel P. Malloy’s administration could agree upon were added up the final price tag was $516 million.
The item with the biggest price tag is a $340 million investment in the Manufacturing Reinvestment Account. It’s a program that allows manufacturers to invest pre-tax profits for a certain number of years in an investment account. That money is then reinvested in a company.
Department of Economic and Community Development Commissioner Catherine Smith said the $340 million investment will generate a $2.25 billion return on investment to the state over the next 10 years.
But aside from the large investment in manufacturing, the package also includes smaller investments for all types of companies.
Small businesses will be able to take advantage of up to $50 million in loans and matching grants for job creation. There will also be another $10 million available to subsidize training for employees for up to six months. The companies participating in the training program will then be able to hire the skilled workers full-time.
The package also increases the job-creation tax credit from $200 per job to $500 per job, but the program will remained capped at $20 million.
The package eliminates one year of the $250 Business Entity Tax that all companies pay annually to the state and many view as nuisance tax. The package doesn’t eliminate it this year, but it eliminates it in the second year of the biennium and turns it into a biannual tax.
In her presentation to the legislature’s Commerce and Labor and Public Employees Committees Smith joked about the reduction in the tax saying it’s something that rarely happens.
Office of Policy and Management Secretary Ben Barnes said he didn’t believe the reduction in revenue will hurt that much.
The package includes another $50 million for the state’s “Fix-it-First” road and bridge improvement program, and $20 million for brownfield remediation. On the smaller side, there’s $5 million for farmland preservation and $5 million to replace the boilers and furnaces for nonprofit community providers and Housing Authorities.
The boiler and furnace replacement money was one of the items holding up negotiations on the package, which didn’t come together until earlier today.
Republican lawmakers said Democratic lawmakers and Malloy initially wanted to spend $15 million to help low-income individuals purchase new boilers and furnaces, but Republicans objected saying it wouldn’t help many people since many of those receiving the heating assistance don’t own their own homes.
Asked about how that item creates jobs, Malloy said someone has to come and install the boiler or furnace.
Republicans said the problem with that is that it doesn’t sustain jobs.
Malloy argued the state will benefit if the new equipment can lower the price of electricity at the state’s Housing Authorities and community providers, which the state also helps fund.
“We’re actually potentially allowing more money to be directed at other areas, either the direct provision of services—generally requiring more employees,” Malloy said. But he admitted “it is a trial program.”
House Minority Leader Lawrence Cafero said they weren’t willing to support a $15 million boiler and furnace replacement program for individuals, but they will support the $5 million for the community providers.
The fact that Republicans and Democrats were able to come together and agree on a $516 million package seems to usher in a brave new world of bipartisanship.
“I think it says we understand that the failure to address job growth, job retention on a bipartisan basis has hurt the state of Connecticut,“ Malloy said. “So at every step in this process, literally from the say I announced this special session, I did everything in my power to assure this would be done on a bipartisan basis.”
Joe Brennan, vice president of the Connecticut Business and Industry Association, said it’s hard the analyze the package as a whole since it wasn’t released until Thursday morning, but the areas identified for funding were the same areas his organization focused on when it submitted recommendations to elected officials. He said they also suggested putting a heavy emphasis on reducing the time it takes to permit something a company needs to do business.
Reductions in regulations and permitting will be looked at as part of the legislation. According to the presentation Smith gave, an application with the State Traffic Commission that is older than 60 days old will be deemed to be approved if the commission hasn’t taken action on it.
“The unpredictability of the permitting process has been immensely frustrating and very costly,” UConn Economist Fred Carstensen testified Thursday. He said that one of his colleagues says the business growth problem in Connecticut has not been cost, it’s been climate.
He said he’s aware of a company in eastern Connecticut that filed for a water permit in 2002 and they’re still waiting for it.