GOP Hears About How Other States Try To Lure CT Business
Gov. Dannel P. Malloy isn’t the only one embarking on a tour of Connecticut businesses. Sen. Minority Leader John McKinney, R-Fairfield, is following suit and hopes to hear the same thing on his jobs tour, so when the General Assembly returns for a special session on jobs they’ll be on the same page as the Democratic governor.
“I don’t believe the governor is going to hear anything different than what we’re hearing,” McKinney said Thursday after a visit to BYK USA in Wallingford. “You can’t understand how you can help them unless you listen to them.”
In listening to a variety of companies brought together by the Quinnipiac Chamber of Commerce Thursday McKinney and Sen. Len Fasano, R-North Haven, heard about relocation offers companies are getting from other states.
Nick Caputi, chief financial officer of BYK, said California, Ohio, North Carolina, and Tennessee are all states interested in enticing the specialty chemical additive company to move in exchange for large tax breaks. The company employs 80 people and has been in Connecticut for 30 years.
“I must every other week still get information and sort of, ‘what can we do for you’ from states like the Carolina’s,” Caputi said. “And I can tell you the offers are very attractive.”
Ulbrich Steel officials told McKinney and Fasano they ended up opening a plant in Oregon and found the state very welcoming. Tom Curtin, of Ulbrich Steel, said they opened up an operation there because that’s where one of their customers relocated. They were given tax incentives for the venture, but were not specific about how much assistance they received.
Caputi said his company met twice with former Gov. M. Jodi Rell’s economic development team and twice they were offered a loan, but it’s not what they were looking for. Caputi said since the company has a healthy balance sheet it could probably do better getting a loan from a bank.
He said everyone knows it’s debt that sinks companies, so what he needs are things that can help the bottom line and cash flow. He said tax breaks and education credits are more helpful than a loan. He said the state of Tennessee offered the company a 10 year tax holiday.
Regardless of incentives, he said the company is going forward with a $25 million plant expansion so it can increase the volume of chemicals it makes from 57 percent to 80 percent by 2014, but he hesitates to have another conversation with Connecticut economic development officials.
“I don’t know if it’s going to be worth the time of ourselves or our organization,” Caputi said. “I don’t know if there’s going to be any benefit we could get.”
McKinney said Caputi’s concern is similar to concerns he heard Wednesday from manufacturers.
“We need to allow companies to work with their cash flow,” McKinney said. “If we could establish a manufacturing reinvestment account which would be funded with money the state takes off the tax rolls for these companies, put it in a community bank, and allowed companies to borrow from it to invest in their business, that’s something that could be helpful.”
He said the state needs to allow the companies to hold onto their money so they’re able to reinvest it in creating jobs and expanding their operations.
“We need to free up the cash flow to allow they companies to make investments in their business,” McKinney said.
Peter Malone, of Thurston Foods, a second generation food distribution company, said the state is heavy-handed when it comes to regulations.
“We have people on our payroll who do nothing but comply with government,” Malone said.
He said his biggest problems have been with the Department of Labor and its unemployment division. He told a story about how one of his drivers left a $100,000 truck with $20,000 worth of food on it on the side of the road and didn’t tell anyone he decided to quit.
“He files for unemployment and he wins,” Malone said. “Guy abandons his truck in the middle of the day and he wins.”
Another employee was in the newspaper for possession of narcotics, so when he came to work they gave him a drug test before allowing him to operate a forklift. He failed and they dismissed him. But he won his unemployment claim.
“They have 99 weeks in which they can collect unemployment and everybody wins,” Malone said.
Malone said his company has turned over some of the unemployment claims on appeal, but has lost its fair share of them which increases the companies unemployment compensation experience tax rating.
McKinney said unfortunately it’s just a assumed that the way the state fills up the unemployment insurance trust fund is by taxing businesses. He said the state could cut spending by $200 million and use that money for unemployment compensation.
McKinney continues his jobs tour Aug. 18 with a stop at Marion Manufacturing in Cheshire.
Click here to read about his visit to Lacey Manufacturing Wednesday.