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Rowland Slams Rell on Corporate Welfare

by Christine Stuart | Jul 6, 2010 11:51am
(3) Comments | Commenting has expired
Posted to: Corporate Watch, State Budget, State Capitol

(Updated 4:30 p.m.) Former Gov. John G. Rowland was behind the microphone at WTIC 1080 Tuesday morning causing trouble for his successor and a little for himself.

Rowland criticized Gov. M. Jodi Rell’s decision to offer Oakleaf Waste Management $3 million to relocate from East Hartford to Windsor and create 40 new jobs. Rowland is filling in for WTIC host Jim Vicevich.

“This is a classic example of waste and abuse,” Rowland said. That’s $75,000 per job. He said when he was governor he never used incentives to move a company from one Connecticut location to another.

Department of Economic and Community Development Commissioner Joan McDonald recalled in a phone interview Tuesday that Rowland offered Diageo North America, a liquor distiller, millions of dollars to move from Stamford to Norwalk in 2003. Click here to read Dan Haar’s column on that $40 million giveaway.

McDonald also defended the Rell administration’s decision to make the offer to Oakleaf. She said when the 49 other states stop offering incentives to businesses then Connecticut will drop its incentive program too.

“We know they had credible offers from the state of Georgia,“ McDonald said.

After threats to leave the state and move its workforce of 387 employees to Georgia, Oakleaf Waste Management, which works with corporations to help them reduce their waste management costs,decided to move just 10 miles. It also agreed to add 40 new jobs.

A full economic modeling assessment and a “counter factual analysis” was done to figure out what the jobs, income, corporate, and sales tax losses would be if the company decided to relocate. McDonald wouldn’t say what the final number came to, but said it was “significant.”

She said while they tried to help Oakleaf stay in East Hartford, her priority is to keep the company in the state. In order to accept the $3 million, the agreement will include a claw back for job creation and require the company to stay in the state at least 10 more years.

Rowland opined that the decision to spend $3 million in taxpayers’ money is even worse when you consider the fact that the state is putting the tab on its credit card. McDonald said depending on the amount of money, some of these tax incentive programs or grants have to be approved by the legislature. The $3 million doesn’t fall into that category.

University of Connecticut Economics Professor Fred Carstensen said Tuesday that if the state received a “credible threat” the company was going to leave, then $3 million may be a good investment. He said the state will probably add a claw back provision to the deal, which requires the company to create the 40 jobs if it wants to receive all the money.

And while Rowland may have had a large listening audience on the 50,000 watt radio station, as of 1 p.m. Tuesday only two individuals called Rell’s office and urged her to take the item off the agenda.

The state Bond Commission is expected to vote on the $3 million grant Tuesday, July 13.

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(3) Comments

posted by: Shawnzo | July 6, 2010  5:07pm

It will be interesting to see if anyone tracks whether or not 40 new jobs actually get created.

posted by: Martha H | July 6, 2010  6:13pm

Martha H

Mad-Man Libs:

“The reason that the opinion of a deeply corrupt hack ex-gov is be given any attention at all in the press is that ______ (embarrassingly amoral excuse).”

posted by: Brian Parker | July 7, 2010  11:27am

Brian Parker

Slams?
err..

Headline exuberance?