Connecticut Gov Latest to Propose Consolidating Economic Development Efforts

Adding to a growing number of governors proposing to consolidate state economic development agencies, Gov. Jodi Rell last week announced in her budget request her intention to overhaul Connecticut's job creation infrastructure by merging several state agencies into the Department of Economic and Community Development (DECD). In recent months, governors in New York and Kansas, for example, have touted cost savings, streamlining government services, and creating a more efficient system to assist in business development and job creation as reasons for the proposed mergers. However, in two cases, critics have argued the consolidations would lead to a loss of key programs serving the TBED community (see the Jan. 21, 2009 and the Dec. 17, 2008 issues of the Digest).

Under Gov. Rell's proposal, the state's two primary financing agencies, Connecticut Innovations, a 20-year-old quasi-public agency that provides venture capital to high-tech start-up companies, and the Connecticut Development Authority would be combined to form a new Connecticut Economic Innovations Authority. DECD would oversee the state's Small Business Innovation Research (SBIR) outreach program and the tourism, film and art programs currently led by the Connecticut Commission on Culture and Tourism. The governor's budget proposal merges or eliminates a total of 23 agencies and commissions, reports The Bond Buyer.  

The newly structured DECD would receive $92.6 million in the governor's 2010-11 biennial budget. Funding for several TBED initiatives administered by the agency would be slightly reduced from the funding levels approved in the 2008-09 budget (see the July 11, 2007 issue of the Digest). This includes:

• $1.9 million (down $100,000) over the biennium for the Small Business Incubator Program;
• $1.9 million (down $100,000) over the biennium for CONNSTEP;
• $570,000 over the biennium for the Nanotechnology Study;
• $475,000 (down $25,000) over the biennium for Hydrogen/Fuel Cell Economy;
• $475,000 over the biennium for SBIR matching grants; and
• $270,750 over the biennium for Entrepreneurial Centers.

Funding for the Connecticut Center for Advanced Technology Manufacturing Supply Chain is eliminated in the governor's budget request ($750,000 each fiscal year). This program was established by 2005 to promote supply chain development and integration and to stimulate process improvement at small- and medium-sized manufacturers in the aerospace and defense sector.

To bridge the gap between high school and higher education, Gov. Rell wants to merge the vo-tech high school and community college systems within the state's Office of Workforce Competitiveness and create the Middle College System. Her proposal would allow high school students to earn up to 49 college credits by the time they enter college. Students would be able to take up to two courses per semester beginning in 10th grade that earn college credit and count toward high school graduation. The budget request includes $304.65 million in FY10 and $309.6 million in FY11 for the effort.

Earlier this month, Gov. Rell signed Executive Order No. 23, establishing guidelines to train and develop the state's green collar workforce. The order calls for reallocation of funds for existing job training to the new 21st Century Green Jobs Training Initiative in addition to the following directives:

• Establishment of a plan for growth of green industries and identifying those jobs that qualify as green jobs;
• Creation of a Green Collar Jobs Council comprising the Departments of Education, Higher Education, Environmental Protection, Labor and Economic and Community Development, the Energy Workforce Development Consortium, and representatives of business and industry;
• Creation of eight certificate credit programs and training of 320 students within the next two years through the Community College System; and
• Priority given to green energy projects when awarding grants from the Small Manufacturers Competitiveness Fund.

Connecticut is facing a projected $6 billion deficit over the next two years. View Gov. Jodi Rell's 2010-11 budget proposal at: http://www.ct.gov/governorrell/cwp/view.asp?a=1317&Q=433326.