RSSMalloy to make major economic development announcement this morning
Jul 18
Corporate Viewpoint, Economic Development, Malloy, State Budget Economic Development, Malloy, UTC 6 Comments
Late yesterday, Governor Malloy’s press operation released a media advisory that “On Wednesday morning, Governor Dannel P. Malloy will hold a news conference in North Haven to announce the details of a new international company that will be establishing its headquarters in Connecticut and creating hundreds of jobs in the state.”
Using scarce tax dollars (the state is facing a major budget deficit), Connecticut’s governor, like governors all across the nation, will provide another company with an “incentive” to create or retain jobs here instead of someplace else.
When government provides financial support for people it is called welfare, when it does it for corporations, it is called an “economic development” policy. Whatever you do, don’t call it corporate welfare. They don’t like that term.
Meanwhile, only hours before, the Hartford Courant published a story entitled “Loss of 75 Hamilton Sundstrand Employees Is Much Larger Than Numbers Suggest”
According to the Courant, “The move of 75 Hamilton Sundstrand employees from Windsor Locks to Charlotte — as Hamilton merges with Goodrich Corp. — is a more substantial economic loss to Connecticut than the simple numbers imply.
Heading to North Carolina are the vast majority of Hamilton’s executives and senior managers — with an average salary of $290,000 for the group as a whole, according to documents supplied by Charlotte’s economic development office.
That means that of the $64 million annual payroll that will be paid in Charlotte after the headquarters of United Technologies Corp.‘s Aerospace Systems division is established there, nearly $22 million is moving from Connecticut. Charlotte is now headquarters of Goodrich, which UTC is buying in a $16.5 billion transaction.
Because the salaries are so high, the loss of these 75 jobs is in many ways similar to losing 400 typical wage jobs, said Fred Carstensen, a University of Connecticut economist and director of the Connecticut Center of Economic Analysis. And when you consider that some of these employees have well-paid spouses, the loss could be even greater.”
Apparently UTC informed North Carolina’s economic development officials that the state was competing with Virginia, Florida and South Carolina for the jobs. In the end, North Carolina came up with $21 million to close the deal.
There was no mention of whether Connecticut was provided an opportunity to give UTC even more money in an attempt to convince them to stay in their “home state.”
When these issues come up, business leaders falsely suggest that corporate taxes are higher in Connecticut.
The high cost of labor has also consistently been cited by corporate executives as a primary reason to avoid doing business in Connecticut.
In fact, only two years ago, UTC’s chief financial officer told a group of Wall Street investment analysts that UTC was looking to move jobs out of Connecticut saying that “anyplace outside of Connecticut is low-cost.”
However, as the Courant notes, the average wage in Mecklenburg County is 51,792, compared to an average wage of $52,920 in Metro Hartford…
Meanwhile, the Courant story notes that “in addition to the managers transferring to Charlotte, 214 Hamilton manufacturing jobs are slated to move out of Connecticut to Poland, Russia, Arizona, Singapore and Puerto Rico. Those jobs pay about $65,000 annually, not including overtime.”
And to those who say “Connecticut didn’t do enough” to help poor UTC, remember that every year, significant public funds go to pay for the Connecticut’s research and development tax credit programs including the property tax exemption for manufacturers. One of the prime beneficiaries of these expenditures — you got it — UTC – The United Technologies Corporation.
Check back later to learn how much we’re giving this “new international company” to pass through our great state.
