Connecticut Gov Proposes Grant Consolidations, Incentives for Large Companies

Citing a lack of coordination among the state's economic development agencies as an obstacle for small businesses and entrepreneurs looking to set up shop, Gov. Dan Malloy unveiled a plan to consolidate job training and grant programs as part of the 2012-13 biennial budget. The governor's budget also would incentivize large employers through a competitive program rewarding the first five companies that create at least 200 new jobs within two years.

Within the Department of Economic and Community Development (DECD), the governor recommends $3.7 million in FY12 and $3.6 million in FY13 general funds for the Strategy and Policy program, an increase from current levels, totaling $3.2 million. Of this amount, $2.5 million each year is slated for a new Economic Development Grants account. Several grant programs focusing on TBED would be consolidated into the new account, and budget documents note a reduction in funding for certain grants by 15 percent each year. Grant programs slated for consolidation include: the Small Business Incubator Program, Hydrogen/Fuel Cell Economy, Southeast CT Incubator, CT Manufacturing Supply Chain, CONNSTEP, Development Research and Economic Development Assistance, Nanotechnology Study, Spanish American Merchant Association, and Small Business Innovation Research.

Many of the state's job training programs, including 21st Century Jobs and Opportunity Industrial Centers, also would be consolidated into a new Jobs Training account in DECD. The Office of Workforce Competitiveness and the Commission on Culture and Tourism would be consolidated within DCED under the governor's plan to reduce the number of agencies by 30 percent.

Hoping to generate a significant number of new jobs over a relatively short time period, the governor would combine existing tax credits with new funding to entice businesses to create 200 new jobs in two years or invest $25 million in a business development project. The first five companies to sign onto the program also would be exempt from certain statutory requirements that could delay the delivery of incentive packages, according to the governor's office. Additional funding for the program would come from raising the cap on the Urban and Industrial Site Reinvestment Tax Credit Program from $500 million to $700 million, raising the annual cap on the Job Creation Tax Credit Program from $11 million to $20 million, and authorizing $80 million in additional bonding for the Economic Development and Manufacturing Assistance program. Read the governor's bill.

In addition to spending cuts, Gov. Malloy's budget calls for tax increases on individuals and corporations to help fill a projected deficit of $3.2 billion. The state sales tax also would increase from 6 percent to 6.25 percent and the property tax credit would be eliminated. Budget documents are available at: http://www.governor.ct.gov/malloy/cwp/view.asp?a=11&Q=473940