The state Bond Commission agreed Monday to borrow $291 million to help Jackson Laboratory construct a research lab on the University of Connecticut Health Center campus in Farmington.
The genomic research laboratory based in Bar Harbor, Maine struck a deal with the state, which the legislature approved in October, to create and retain 300 jobs by its 10th year of operation. It will also receive $99 million in research funding and a lease on 17 acres of land, which it can buy for $1 from the state once it creates 600 jobs in Connecticut.
The Bond Commission voted 8-2 in favor of the proposal. The two Republican members of the commission voted against it.
Sen. Andrew Roraback, R-Goshen, who voted against the bonding, said using basic math he calculates the state will be spending $986,950 per job.
Gov. Dannel P. Malloy told Roraback that this is not about the 300 jobs, just as building a university is not about the people employed by it.
“It’s about the future,” Malloy said. “It’s about the building of a bioscience initiative in Connecticut in response to a very clear warning shot that was fired across our bow when Pfizer moved 400 jobs.”
He said Pfizer left for Cambridge, Massachusetts because Connecticut failed to invest in the infrastructure necessary to support their ongoing efforts. He said it seems to be a common theme he’s heard time and time again, whether it’s bioscience of precision manufacturing.
“I understand the question. I actually understand the political argument,” Malloy told Roraback. “But I don’t accept the question as properly stating the level of investment Connecticut must engage in if we are to be competitive with New York, New Jersey, Massachusetts.”
Roraback said he didn’t intend to engage Malloy in a debate, but he wanted to gauge the state’s investment in a private facility and whether other states had offered anything comparable to what Connecticut offered Jackson Laboratories.
Department of Economic and Community Development Commissioner Catherine Smith told Roraback she’d be happy to provide him with that information. She added that most other states were offering what amounted to grants, while Connecticut is offering a structured package, which includes clawback provisions should Jackson Laboratories fail to meet its job creation goals.
Rep. Sean Williams, R-Watertown, who voted against the deal, said he continues to maintain that reducing regulations, taxes, and energy costs will help create jobs faster than big government investments.
However, Williams also said he does believe the practice of past Bond Commissions has gotten the state into the fiscal mess it’s in today.
Fiscal Decisions of the Past
Following the state Bond Commission meeting during a more than 16 minute press conference, Malloy apologized for celebrating a little bit when asked about the conflicting fiscal information regarding the state’s budget outlook.
News that state employee pension savings would fall about $3.1 billion short Friday night was just the second to two news items last week, which pitted the Malloy’s Office of Policy and Management against the legislature’s nonpartisan Office of Fiscal Analysis.
Malloy offered to put the differences over the state’s fiscal woes in perspective.
“We had Republican governors in this state for 16 years in a row,” Malloy said. “They ran up our debt. They brought us really to a point of downgrading our bonds. They entered into transactions, which required us not to fund our pensions properly.”
Connecticut has one of the worst funded pension fund in the United States, and two years before Malloy became governor, former Gov. M. Jodi Rell struck a deal with the unions to delay a $315 million payment to the state employees pension fund in order to help balance the budget.
“I came into a situation 13 months ago facing the largest per capita deficit in the nation, with one of the worst funded state pension plans in the nation,” Malloy said Monday. “A contract with our employees that had gone unadjusted for the better part of a generation.”
He said it was Republican governor’s who locked the state into a pension system which would have required it to make four times the normal annually required contribution the current $920 million contribution.
“I told you all that I was going to work on that issue, along with education, and jobs to a great extent,” Malloy said.
More than a year later, Malloy said 9,000 have been created, unemployment has declined, and “now the Republicans want to engage in a debate on how many billions of dollars I’ve saved the taxpayers of the state of Connecticut.”
“I’ll have that debate with them until the cows come home,” Malloy said. “Because the reality is we are saving billions of dollars.”
Asked about if Moody’s Investor Services downgrading of Connecticut’s bond rating will impact the millions of dollars the state Bond Commission agreed to borrow Monday, Malloy said “not necessarily.“
He said when United States’ bonds were downgraded the next offering was at a lower percentage interest rate than previous bond sales “because there is a fair amount of flight to safety.”
He said every factor Moody’s commented on in its report “pre-dated my administration.”
“Now I would argue we deserve more credit for the steps that we have taken, and by the way in changing our outlook they gave us credit for that,” Malloy said. “But we are in an environment where rating services are for lack of a better term ‘covering their backside’.”
