Hugh McQuaid photo

Gov. Dannel P. Malloy defended his economic development policies Friday against criticism from Sen. John McKinney, a Republican seeking his party’s nomination to run for Malloy’s job next year.

McKinney announced his entry into the 2014 gubernatorial race Tuesday with a press release pointed in part at Malloy policies designed to attract businesses to Connecticut through tax incentives, grants, and forgivable loans. McKinney said the policies have not worked and have taken the state in the wrong direction.

“After three years of picking winners and losers and giving away hundreds-of-millions of taxpayer dollars to big corporations already based in Connecticut, the results of Gov. Malloy’s economic policies speak for themselves: Connecticut is losing. We are the only state in the nation with a shrinking economy, and our unemployment rate, at 8.1 percent, remains above the national average,” McKinney said in a statement.

Following a state Bond Commission meeting Friday, Malloy defended his economic record without mentioning McKinney by name.

“I’ll take my credentials against any Republican when it comes to assisting small businesses in the state of Connecticut,” he said.

Malloy said the incentives his administration offers to businesses are based on a model that looks at a company’s potential for growth and tries to forecast how quickly the state will see a return on its investment.

“These deals pay for themselves relatively rapidly in some cases and in other cases extremely rapidly,” he said.

Malloy said Connecticut has been actively competing with other states for jobs. He pointed to Texas Gov. Rick Perry’s visit to Connecticut last month to lure jobs to his state.

Hugh McQuaid File Photo

“If all states were to absent themselves from the these programs, I would join that movement overnight. Having said that, I can assure you that New Jersey’s not going to stop competing with us. I can assure you that New York’s not going to stop competing with us,” he said, listing other nearby states. “And apparently we’ve had a declaration of war from Texas. So we’re in this to win it.”

In his statement, McKinney alluded to an economic development package the administration gave to Bridgewater Associates, a large hedge fund that plans to relocate its headquarters from Westport to Stamford. He said the state aid could have been better used by struggling small businesses.

Malloy said he was helping small businesses as well. He criticized his predecessor, Gov. M. Jodi Rell, for only reaching out to 119 business over the course of her two terms in office. He said his administration has made investments in or had interactions with over 900 businesses.

“The vast, vast, vast majority of those are small businesses,” he said.

Malloy pointed to the state’s Small Business Express Program, a low-interest loan program. Lawmakers approved borrowing for the program in a bipartisan jobs package that was passed during a special session in 2011.

“That was a toolbox I put together. That was a program I championed. That was a program, I made sure there was agreements for in the legislature, in a bipartisan session that we had,” he said. “We are executing that program, and by the way, it is now a model program amongst the 50 states.”

In Tuesday’s statement, McKinney’s campaign said he also has worked to aid small businesses with job creation.

“McKinney played an instrumental role in passing bipartisan jobs legislation in 2012 which helped streamline the state permitting process and provided incentives to expanding small businesses and businesses that hire veterans off the unemployment rolls,” the statement read.

Although McKinney has so far focused on Malloy’s policies, he likely will not be the only Republican hoping to run against him next year. Tom Foley, the 2010 Republican nominee who lost to Malloy by a slim margin, is also expected to seek the nomination. Danbury Mayor Mark Boughton, Foley’s 2010 running mate, is also believed to be considering a run.

Malloy has yet to announce whether he intends to seek re-election. Asked Friday when he will make his plans known, he answered “sometime in the future” but not in the near future.

“Hey listen, I’ve got a job to do. I’ve got a full-time job — more than a full time job — to do. I’m doing that job. Other people can go out and do there own thing,” he said.