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Malloy Defends Economic Development Policies

by Hugh McQuaid | Jul 26, 2013 1:20pm
(32) Comments | Commenting has expired
Posted to: Economics, Jobs, Labor

Hugh McQuaid photo

Gov. Dannel P. Malloy

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.

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(32) Comments

posted by: ASTANVET | July 26, 2013  2:23pm

“Malloy said Connecticut has been actively competing with other states for jobs” - Horse cr*p!  If that were true, we wouldn’t be talking about a raise in the minimum wage, we wouldn’t have put in the largest tax increase in state history, we wouldn’t be mandating (from Hartford) to employers to have mandatory sick time, we wouldn’t be enacting laws that alienate large manufacturing in our state, we wouldn’t have crushing regulations and a well established entitlement state - competing?  With WHOM??? are we trying to be 49th instead of 50th?  way to set your sights high!  This state is run like a joke - and we will not turn around until we have hit rock bottom, and I’ll bet dollars to donuts that someone will STILL try to blame a republican!—I can hear the chant “this is what austerity looks like… this is what austerity looks like”

posted by: Jackawa | July 26, 2013  3:05pm

Giving away public money = A+

Actual economic results = ?

posted by: eastrivertype | July 26, 2013  4:17pm

Who isn’t tired of hearing our Governor say “it isn’t my fault?”  But then again, if anyone had his record of failure who wouldn’t try and shift the focus to the ineptitude of his predecessors.  He certain continues that record of failure.  The best defense is to attack. He is really good at that.
Unfortunately for all of us,the bottom line is that he has made it even worse.
Yes Rell stayed in her office and refused to lead.  Yes Rowland made a terrible 20 year deal with the unions.
But Malloy has:
1) made a new stupid deal with the unions
2) destroyed the letter and spirit of the spending cap
3) mortgaged the future with borrowing and fiscal gimmicks in order to pretend that the budget is balanced
4) handed out hundreds of millions of dollars to a few companies to either come here or stay here.
Don’t you think that we have to bribe companies to stay here because it is such a rotten place to do business?
Our state economy lags behind the nation.  And he argues that is Rell or Rowland’s fault. 
How much longer will we buy that nonsense?
Time to go to DC Governor.

posted by: Janster57 | July 26, 2013  7:56pm

This state is a disaster area for business. I have 12 employees and the costs are unreal. I had a 5 year plan to move to florida. In May it went to 1.5 years. Now I’m putting my house on the market in October. What are Malloy and the unions going to do when there are no taxpayers left to shear? Gas in Florida is 40 cents cheaper, there’s no income tax, property taxes are a third, there’s no car tax, and they pick up the garbage. What’s to stay for?

posted by: Fisherman | July 26, 2013  9:19pm

Dan Malloy espousing Economic Development policy is a lot like hearing Anthony Weiner talk about being in a committed relationship.

posted by: Commuter | July 26, 2013  10:36pm

Malloy of course is right. He has, in just three legislative sessions, altered the state’s trajectory for the better, in some respects dramatically so. The move to GAAP is a major one, and the funding of the pensions is another. The deal he cut with the unions is already paying off and will save us billions and billions over the next decade.

The aggressive pursuit of commitments from large companies to stay or come to Connecticut has put the state on the map in the case of Jackson Labs, when it clearly was slipping out of the biomedical industry. The deal with NBC sports, according to NBC execs, wouldn’t have happened without Malloy and his “First Five” initiative, and it was a huge win for the state, enhancing our position as a leader in the sports entertainment field. The deal with Bridqewater is just one very high profile example amidst a bunch of others, some of which involved the state and some not.

The small business express program has helped hundreds and hundreds of companies survive and expand, and the Step Up program is another success for small businesses. Those are Malloy programs.

It goes on and on. Malloy is already one of the best governors in the history of this state, and one of the best in the country. We are blessed to have him.

Ignorant, simpleminded complainers and self-serving wanna-be’s should find something else to do with their time.

posted by: Lawrence | July 27, 2013  10:34am

ASTANVET

Most everything you mention—increased minimum wage, pad sick leave, the gun safety bill—were overwhelmingly supported not only by a large majority of CT state residents, but by a large majority of Republicans as well.

You can complain, but your friends and neighbors don’t agree, and you are in the minority.

posted by: RJEastHartford | July 27, 2013  12:18pm

All one has to do is read the posts from “Perturbed” on this site to validate much of the points made in Commuter’s post here.

posted by: dano860 | July 27, 2013  12:54pm

Gun control was a horrible bill that should have gone on the ballot. The sheep in Hartford couldn’t vote any other way because they all want to be re-elected by the unknowing and unaffected.
GAAP is completely bonded, you may as well take out another credit card to pay off the one you maxed out. Doesn’t make any sense.
The Jackson Labs put us on the map because no other States saw any value in them, including Maine, their home State!
Small business people will take the money but don’t expect them to feel it has to keep them here. They default on the loan and no consequences come to them, nobody chases them down.
Bridgewater saw the light, free money and it will be forgiven in the end, no payback! GREAT!
We are still 50th in ranking for business friendly States.
Once in the hole always in the hole.

posted by: justsayin | July 27, 2013  7:12pm

Commuter, glad to see you are enjoying the kool-aid. Soon it will all be gone!

posted by: Lawrence | July 27, 2013  7:43pm

Do you even know what you are talking about??

JL wanted to site a new facility around research universities. Maine doesn’t have them; CT does. READ

Also, JL’s SECOND Maine lab is now expanding…

posted by: Fisherman | July 27, 2013  8:37pm

Lots of mention by posters about GAAP… unfortunately, Malloy never actually implemented it.

Anyone having fluidity with numbers can tell you that Connecticut’s “GAPP-like accounting” is not the same thing as GAPP.

posted by: Lawrence | July 27, 2013  9:03pm

dano860,

What poll are you referring to naming CT as 50th in the country in business friendliness?

I can’t find one.

For 2013, CT is ranked 40, 45,and 35, respectively, by the Tax Foundation, CNBC, and Governing (small-business friendliness).

You can say CT could be doing better, but I’m unaware of us being last. You should quote some facts to back up your statements, if you have those facts.

If not, it is difficult to take your criticisms seriously.

I will add that even if CT is last in ONE poll, it is not last in all polls.

posted by: Commuter | July 28, 2013  12:48am

To Lawrence’s point, Connecticut is actually ranked first in terms of taxes on corporations by one of the big accounting firms.

First.

The misinformation about the spending cap needs to be addressed (again). The “spirit” of the spending cap was to limit taxes and stabilize our fiscal situation, not deprive us of services or federal funding. The “letter” of the spending cap is not consistent with the “spirit” of the spending cap.

The notion that we should include pass-through federal funds (for medicare, or roads and bridges, or anything else) is STUPID on its face. If we can get $20 billion a year for two years in federal funding for medicare, education, and roads, should we zero out the rest of the budget? Should the $600 million in federal highway funds we’re leveraging with $500 million in bond funds be put under the cap? Maybe we should not issue any more bonds at all! It is just ridiculous.

Excluding the pass-through funds is common sense. The money raised from state income taxes, sales taxes, and other levies should fund operating costs, pay down our pension and other such obligations, and build up the rainy day fund to the statutory limit.

Artificially limiting our ability to do that undermines our financial strength, which makes for a less business friendly environment and increases our borrowing costs.

posted by: ASTANVET | July 28, 2013  12:30pm

Lawerence - I’m ok with being in the minority… if a majority of people want to drive a State into a ditch, and i’m in the minority pulling the wheel the other way - i’m ok with that.  My point is, we are not competitive - we have not been competitive - nor do I see a glimmer of hope that we will somehow rise up and become competitive.  The best thing we can do is shed the notion that somehow government planning can better the economy.  The best thing the CGA can do for the next 4 years is start to repeal antiquated anti business laws, and re-write anti business regulation.  Make CT an oasis in the slime of Blue Northeast anti business tradition.  You want to see the state rebound, that’s the direction we need to go.  I fear that will offend your delicate liberal sensibilities, and don’t hold out much hope for reformation.

posted by: justsayin | July 28, 2013  8:51pm

Commuter being first in corporate taxes I assume you mean most….As for the spending cap certainly room for discussion, but let’s have the discussion. Nothing is bad until it does not work for them, but we (the people) are the ones it needs to work for. The spirit was control spending, obviously that is not working.

posted by: Lawrence | July 28, 2013  9:59pm

ASTANVET, Yes sometimes being in the minority is a good thing; it means you are ahead of the curve. I have been there myself.

I agree with you CT has not been competitive in attracting and retaining new businesses and jobs; I generally agree with the path we are on now.

I believe that when people use the phrase ‘pro-business’ what it really means is ‘anti-employee,” and I know more people who work at firms than own them, so I tend to be very cautious when folks criticize CT for not being more “business-friendly.” I believe paid sick days, a higher minimum wage, etc. are good for CT’s residents.

Don’t worry about offending any delicate liberal sensibilities I may have. I am very liberal on some issues, very conservative on others.

posted by: dano860 | July 29, 2013  9:04pm

Lawrence, I was wrong, there I’ve said it. I repeated something I read on another site. So after looking up ‘polls’ for the ranking of Ct with regards to business I find we are #45, that’s according to CBIA and CNBC. The CNBC poll had the ranking since 2008 also, we were # 34. In 2009 we went to #35, 2010-#35, 2011-#39, 2012-#44 and today #45. If we continue the trend we will hit #50 someday. With #49 being contiguous to us, Rhode Island, we stand a good chance. Even they have had new business enter the Quonsett Business Park. Of course if we count the states like Mr. Owebama we still won’t be at the bottom though.
The J.L. failure to flim flam Florida out of $260M for 244 jobs led to their getting Dannel to pony up $291M plus 17 acres of State land plus $99M for research. There wasn’t any job numbers in the article I read. They also never disclosed the letter of memorandum either, there were no company secrets being divulged in the letter, it was an excuse they foisted on the Ct. citizens.
When they went to Maine for the big loans and tax incentives they were rejected, that was before going to Florida and being rejected by Collier County. Sure they are growing in Maine now…using whose money? CONNECTICUT’S maybe?

posted by: dano860 | July 29, 2013  9:38pm

Christine, please correct my citing of MSNBC, it was CNBC.
Sorry!

posted by: Nutmeg87 | July 30, 2013  9:09am

Fellas…

Really….  #45 or #50…  It’s bottom DECILE..  SUBTERRANEAN BASEMENT…  BEYOND GUTTER… 

Malloy has done nothing for CT but buy jobs from Wall Street & Financial sector with borrowed $$$ in forgiveable loans, tax treatment & subsidies…

We are bottom decile (I think second or first) HIGHEST DEBT/capita in country…

WE NEED A FRESH CHANGE!
THAT MEANS NO MORE MALLOY…  (OR McKINNEY for that matter)...

posted by: Art Vandelay | July 30, 2013  9:43am

To Commuter:
I respect your views, and understand the fact that you’re a hard core progressive liberal Democrat.  First off, Malloy NEVER implemented GAAP. He’s using the same methods previous Governors have done to “juggle” the books.  The only difference with Malloy is that he’s doing it MUCH more aggressively.  Second, Florida & other states wanted nothing to do with Jackson Labs. It’s ironic that Malloy did nothing to stop Pfizer from leaving Groton. No “First Five” gift there! Third, ESPN was given a “First Five” after they threatened to pull up stakes. The Democrats need to realize that Connecticut needs to compete with states which have no income tax, are right to work, with little to no government interventions.  If Connecticut benchmarked states like Florida, Tennessee and Texas instead of Massachusetts, New York and California, we would be much better off economically.  Private companies would be lining up at the boarders to make Connecticut their home instead of leaving.
I think you are looking at Malloy through rose colored glasses while drinking the Kool-Aid.

posted by: Commuter | August 3, 2013  12:03am

Art, you simply don’t have your facts straight on Malloy, or most of anything you’re saying.

There have been a number of reports in the press on the state’s efforts to retain Pfizer. A funny thing about your criticism is that in the next breath you might be telling me that government doesn’t create jobs and the only thing we can do to help the economy is to stop trying to help. You’re a critic of “First Five.” How do you square that with your remark about Pfizer?

I did some digging this week, and several knowledgible investors who are very familiar with the Pfizer situation offered the view that there was nothing the state could do, because the failure was the Pfizer business model. They retrenched like many other firms that relied on similar business expectations. I also heard that they still maintain a presence there (but I have not had time to look into any further).

You’re also wrong on implementation of GAAP, I’ve learned by searching the news sites. The borrowing you appear to be referring to amounts to a restructuring of the remaining overhang from previous administrations and other adjustments to bring the balance sheet to par. This was due to lower than expected revenues. It is also important to note that these budgets include billions paid into the pensions as required by GAAP. So you’re just wrong there.

You’re so far off base on the state to state comparison I’m not going to make a long comment longer trying to explain it to you. You’re comparing apples and oranges. I respectfully suggest you get better acquainted with the facts before accusing me of drinking the Kool Aid and so on.

posted by: Commuter | August 3, 2013  12:08am

Uh oh, we’ve slipped to #2: http://www.ctmirror.org/story/2013/07/30/are-business-taxes-high-given-what-connecticut-companies-can-earn
I’m just sayin’.

posted by: Commuter | August 3, 2013  12:17am

The spending cap has been blown through repeatedly by Republican governors (you can’t blame the legislature for that one) in years far less challenging than the ones that Malloy has faced.

Clearly the legislature insisted on more spending than Malloy’s budget called for, and that required some measures that were not part of Malloy’s proposals.

The fact remains that spending under Malloy is growing more slowly than under his predecessors, GAAP has been implemented, the pensions are being funded, the curve on labor costs has been flattened, and the private sector is creating jobs at the fastest rate in over ten years.

Those are the facts. Malloy is demonstrating that he is a practical, fiscally conservative leader who is turning the state around.

posted by: eastrivertype | August 3, 2013  4:13pm

Commuter are you for real?  “you can’t blame the legislature for blowing through the spending cap.”  It is the fault of previous Republican Governors!!  There have been massive Democratic majorities in both chambers for decades. When a Republican Governor proposed his or her budget it took less than 48 hours for the Democrats to proclaim it dead.  Get real.  There are Democrat and Republican prints on subverting and destroying the spending cap that we as voters overwhelmingly wanted.  But they know better don’t they.  Why should they listen to us?
At least this Governor and the Democrats make no secret of the fact that they believe the spending cap is a joke.
And look at the great results.  We may not be Greece, but we can sure try to be like Detroit.  Bankrupt.

posted by: Commuter | August 4, 2013  6:24pm

eastrivertype, I’m referring to the governor’s declaration of an emergency or whatever its called, required to exceed the spending cap, which was invoked in the past and which the legislature cannot compel.

Malloy didn’t say the cap was a joke. He said we would abide by it, and made the common sense argument that pass-through federal money shouldn’t be included. As I mentioned before, the point of the cap was to restrain taxes and ensure our fiscal situation improved (the reason for institution the income tax in the first place), not to deprive us of federal money or services. What had been missing was GAAP and any discipline on the part of Rowland and Rell - neither was willing to spend the political capital necessary to deal with the legislature effectively.

Malloy has given us GAAP and expended plenty of political capital to get the fiscal situation under control. He is succeeding - although he’s said on TV and in print we have a long way to go when it comes to funding the overdue balances in the pensions and the underinvestment in infrastructure (to name two areas) that Rowland and Rell failed to make when they were supposed to.

No need for hysteria, we are not Detroit, and thanks to Malloy’s leadership, we aren’t going to be.

posted by: Commuter | August 4, 2013  6:30pm

ASTANVET, minimum wage and mandatory isn’t a factor for large manufacturing in the state, or almost anybody else. Its a mostly a factor for large, sophisticated companies like WalMart, some of whom have figured out how to game the system so that their employees’ health insurance, for example, is absorbed by the state under the Husky program. If these large companies are permitted to shift those burdens onto the state, who do you suppose is paying the tab? You and me. You should be applauding this, but you don’t understand it.

We are getting more competitive, and how we compete is not by trying to be Texas or Florida or some other state with no similarities to us. We compete for industries who can both afford and need to pay very competitive wages and offer a high quality of life to attract the talent they need to compete. Again, you don’t seem to understand this basic aspect of Malloy’s strategy.

posted by: Art Vandelay | August 4, 2013  9:04pm

To Commuter,
I understand Malloy’s Economic Strategy 100%.  It’s a total and dismal failure.  From your posts I have to conclude that you work in Malloy’s Propaganda Office or are related to him in some manner. Granted Malloy has done a few things correct not many mind you, but nobody can believe totally that he is the greatest politician that ever lived like you do.

posted by: Commuter | August 5, 2013  8:29pm

I see.
Art Vandelay & ASTANVET = same guy.
Thanks for clarifying that.

posted by: Art Vandelay | August 5, 2013  10:31pm

To Commuter,
This may come as a shock to you but there are more than one Conservatives in Connecticut.  ASTANVET & I are NOT the same bloggers.

posted by: ASTANVET | August 6, 2013  6:23am

commuter - only in your world does adding expenses, wage requirements, regulation make for a better, more competitive environment.  It all ads to the bottom line and increases costs.  And no - Art and I are not the same people - there are a growing number of conservatives here that are more and more vocal.

posted by: Commuter | August 6, 2013  11:06pm

The problem is not your point of view, Art VandSTANVET, it is that you have not understood the subject you’re talking about. You frequently get the facts themselves wrong. And then you engage in name calling and labels.