Since taking office, Governor Dannel Malloy and his administration have shoveled hundreds of millions of dollars in “corporate aid” to dozens of companies as part of their ongoing efforts to “persuade” business to stay or grow in Connecticut.
As CT Voices for Children, a non-profit, non-partisan research group explains,
These incentives come in the form of direct aid, such as discounted loans and grants, and business tax breaks, such as tax credits, which reduce the tax liability for investors, industries, and individual firms.”
Other than some limited review by the very agency that hands out the money, there has been little public oversight of this massive outlay of public funds.
Last year legislation passed the Connecticut General Assembly to require greater oversight but Governor Malloy vetoed the bill and his allies in the legislature choose not to try and override the veto even though there was broad, bi-partisan support for the law.
However, a new bill before the legislature could finally require proper oversight of the state’s economic development programs.
Just last week the General Assembly’s Finance Committee held a public hearing on House Bill 7316, An Act Concerning Evaluation of Business Assistance and Incentive Programs. The legislation would dramatically expand the level of oversight and transfer some of the duties to monitor and report on the corporate welfare programs to the Office of State Auditors, an independent agency.
State Comptroller Kevin Lembo has been one of the most outspoken proponents for the need for more oversight of the public funds being spent on business incentives. His legislative testimony can be found – here.
Speaking in favor of the bill CT Voices noted,
A more efficient, transparent, and fair budget process would include regular reviews of all economic development incentives to ensure that tax expenditures are yielding the promised economic development benefits. The proposed legislation does just that by ensuring that business tax breaks undergo regular scrutiny to determine their effectiveness.
Tom Swan, the Executive Director of the Connecticut Citizen Action Group added,
We believe that the review process outlined not only makes sense, but is long overdue. In recent years, we have seen increases in corporate handouts, while making severe cuts to our safety net and critical needs. This bill will help to provide the legislature with the tools you need to determine the efficacy of these programs going forward. We particularly like having the Auditors conduct performance audits and the involvement of legislative committees formally within the oversight process. We believe this will lead to better results from our business assistance and incentive programs and lessen the possibility of these programs being corrupted.
The full legislation can be found at: https://www.cga.ct.gov/2017/TOB/h/2017HB-07316-R00-HB.htm