and Keith M. Phaneuf
October 26, 2011
The Senate gave final passage Wednesday night to a bipartisan jobs bill crafted to provide economic incentives to manufacturers, major employers and small businesses, while scoring a political victory shared by Gov. Dannel P. Malloy and legislative Democrats and Republicans.
With only one Republican dissenting, the Senate voted 34 to 1 in favor of a bill negotiated over weeks by the Democratic governor and the legislature’s Democratic majority and the GOP minority. The House passed it hours earlier, 147 to 1.
The legislation earmarks $626 million in bonding in over the next two years for an array of programs, including $340 million to expand the governor’s First Five program for major employers, $50 million for transportation infrastructure, and $10 million for small businesses in town centers. Another $75 million also will be bonded in future years.
With the costs of borrowing, the bill will cost $1.1 billion over 20 years.
“I believe it’s a billion dollars we don’t have,” said Sen. Kevin Witkos, R-Canton, the only senator to oppose the measure.
But he was the exception. His colleagues spent the evening talking about the public’s thirst for action, and they promoted the details of a legislative package that offers some incentives as the economy seems to be stalling.
“What I heard was clear and direct,” said Sen. Kevin Kelly, R-Stratford. “People want jobs, and they want them today. And they don’t want any more partisan division.”
The bill creates a monthly credit of $500 for new jobs created in a two-year period beginning Jan. 1, 2012, with a $900 credit to companies that hire an honorably discharged veteran, a person with a disability or a job-seeker now collecting unemployment benefits.
A new grant program in the bill offers eligible companies with no more than 50 employees a subsidy to cover a portion of the cost and training of a new employee for six months. The bill also outlines a process under which permitting is to be streamlined.
(An analysis by the non-partisan Office of Legislative Research is online.)
But the novelty of bipartisanship in the autumn of a tumultuous year, when Mally’s budget and other major initiatives passed on largely party-line votes, was trumpeted as often as the details of the bill, An Act Promoting Economic Growth and Job Creation in the State.
“There is real disgust with what is happening in government, the partisanshsip,” said Senate Minority Leader John P. McKinney, R-Fairfield. “Sadly, that disgust is justified.”
His counterpart in the House sounded a similar theme.
“One brief shining moment or maybe a new chapter in how we will do business in this chamber,” said House Minority Leader Lawrence F. Cafero Jr., R-Norwalk. “That’s what I think this bill represents.”
The sole dissenter in the House was Rep. Chris Coutu, R-Norwich, a candidate for Congress. Like Witkos, he objected to the package’s $626 million in bonding.
McKinney defended the scope of the borrowing, saying the governor has assured legislators that other borrowing will be deferred in favor of the jobs bill, keeping the state within its limiting on bonding.
“We’re not adding new debt,” McKinney said. “We’re findng better ways to spend our money.”
Even passing a bill nearly unanimously takes time. The debate lasted 2½ hours in each chamber, as legislators took turns saying they have absorbed a message from voters and businesses: Connecticut needs a better business environment.
“We all heard this,” said House Majority Leader J. Brendan Sharkey, D-Hamden. “We heard the need for making Connecticut a better place to do business, a friendlier place to do business, a place where people can find jobs, where we are coordinating our services, our educational resources to match what our companies in our state need.”
The overwhelming bulk of the job-growth initiatives will be financed with $626 million in bonding. After 20 years’ worth of interest charges are applied, the projected debt will approach $1.1 billion, according to the legislature’s nonpartisan Office of Fiscal Analysis.
The loudest dissent to the bipartisan bill came outside the chamber from universal healthcare advocates who gathered outside the governor’s office to complain about what was not in the package.
Many held signs that said “health care = job growth.”
Juan A. Figueroa, president of the Universal Health Care Foundation of Connecticut, said it was a “missed opportunity” that the jobs legislation did not address health care coverage, which he said is a barrier to people starting businesses.
“Talking about ways to help grow jobs and push the economy toward recovery is great, but failing to address one of the biggest reason small businesses say they can’t retain or add workers means the state is overlooking a critical factor,” Figueroa said in a statement.
But the consensus jobs bill was just that — a collection of ideas acceptable to the leaders of all four legislative caucuses and the administration, which ruled out an attempt to broaden health coverage.
Negotiations continued until Tuesday night, and the final version of the bill was unavailable until midday, shortly before the start of debate in the House.
The total cost of the measure changed after the Office of Fiscal Analysis finished its review. The administration’s cost estimate of $516 milliion rose to $626 million over this year and next, and $701 million overall.
A quasi-public arm of the state’s economic development program, Connecticut Innovations Inc., would receive a dramatic boost in funding to invest in a wide-array of start up companies with $50 million in bonding over the current biennium and another $75 million in future years.
More than half of the initial bonding, $340 million, would be used to double the scope of the governor’s First Five Program, which provides incentives to companies committing to create 200 jobs.
Proposed by the governor and developed with the legislature this past spring, First Five originally gave the administration discretion to award “substantial financing assistance” annually to up to five new companies or existing businesses looking to expand. Eligible recipients must pledge to create at least 200 new jobs and can take up to five years to meet that goal provided they invest at least $25 million of their own funds in the expansion.
The program allows for a wide array of assistance, which can include tax credits, low-interest loans, technical consulting, or employee education and skill upgrades. Malloy already has awarded aid to four firms through the program, including a $20 million aid package announced Tuesday for NBC Sports to move into Stamford.
The additional bonding is expected to provide sufficient funds to allow up to 10 companies to participate through the end of the 2012-13 fiscal year.
A quasi-public arm of the state’s economic development program, Connecticut Innovations Inc., would receive a dramatic boost in funding to invest in a wide-array of start up companies with $125 million in bonding.
Another major bonded initiative involves $100 million for Small Business Express Package, which would provide job creation grants and loans specifically to smaller companies.
Nearly $10 million would be bonded both this fiscal year and next to expand the precision manufacturing program at Asnuntuck Community College in Enfield and to establish or expand manufacturing technology programs at three other community colleges.
Other financing for job growth initiatives include:
- $50 million for bridge improvements through the “Fix It First” program.
- $20 million for the Step Up program, which will encourage businesses to add employees in new areas by subsidizing the cost of those posts for up to six months.
- $20 million for brownfield remediation.
- $10 million for infrastructure and other improvements to enhance commercial zones in municipalities through the Main Streets Initiative.
- $10 million to help nonprofit social service providers and local housing authorities replace aging oil furnaces and boilers with fuel-efficient equipment.
The plan also includes several tax changes, including effectively cutting in half the $250 business entity tax a flat registration fee businesses pay annually. But starting in 2013, that $250 payment would cover two years’ worth of registration. Analysts estimate this would cost state government $40 million in the 2013-14 fiscal year and every other fiscal year thereafter.
The minimum investment required for an investor to qualify for an income tax credit through the state’s Angel Investor program would drop from $100,000 to $25,000. This is expected to cost the state $1.5 million per year.
A new job expansion credit would be added to several tax programs, costing between $15 million and $17 million annually beginning next fiscal year.
Connecticut’s film tax credit program also would be expanded to offer a new category for television production costs. This is expected to cost the state between $10 million and $19 million next fiscal year and between $5 million and $10 million annually thereafter.
Perhaps the largest area of bipartisan consensus since Malloy first announced plans in June for an October session on job growth was a need to improve what is perceived by businesses as Connecticut’s oppressive regulatory environment.
The new legislative package calls for state government to hire a consultant to streamline regulations, particularly with a focus on four large permitting departments: Administrative Services, Energy and Environmental Protection, Transportation, and Economic and Community Development.
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