On a bipartisan vote, the Commerce committee sent a message to the governor and his economic development agency that they want to see more transparency on the incentives the state provides to companies.
"It's important that we have a lot of accountability and regular reviews of performance metrics to see if the program is working,” said Sen. Scott Frantz, the GOP Chairman of the committee.
He’s bothered by the fact that the governor’s signature economic development program, “First Five,” has extended far beyond its original purpose. “It's not really the First Five program, because we're up to 15 companies in the program."
The state has provided $250 million to 13 companies since its inception. The millions are provided in multiple forms that include forgivable loans, grants, and tax breaks.
The governor and his Department of Economic and Community Development negotiate all deals and manage the program, including its “clawbacks,” to ensure compliance with the program.
"I'm not against more accountability,” Malloy said of the bill’s committee passage.
He also said he recognizes the timing of the bill, because just a week ago, pharmaceutical company Alexion announced the layoff of 200 workers globally. The company employs more than 1,000 in Connecticut, but a spokesman wouldn’t say how many would be felt in Connecticut. Since the company received a package that could be worth as much as $50 million, it rubbed lawmakers and some taxpayers the wrong way.
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“You know, there are these things that puts everyone's hair on fire because they say well a company is going to lay off part of its workforce when in fact that company has far exceeded their expectations and guarantees with respect to what our agreements required."
According to DECD records, the company had a target to hire between 200 and 300 people, when it eventually hired more than 500 in compliance with the First Five program.
Sen. Frantz says he wouldn’t mind having the General Assembly approve all economic incentive agreements.
"These deals are typically negotiated for about two or three months or so things, like that, so they would be able to take into account the potential legislative approval and say look, we either need to either speed things up or slow things down."
The governor said he would never turn down more scrutiny over incentive packages, because he maintains they are good for Connecticut and even better for taxpayers.
"If you're asking me do I mind people looking over my shoulder, the answer is no."
