TAX NEWS - June 2010
Malloy Not "Big" on Business Tax Credit Incentives
The former Stamford mayor said it would make sense to provide incentives, for example, "to companies investing in green technology, particularly on the energy production side."
Mr. Malloy, who faces Greenwich businessman and 2006 U.S. Senate nominee Ned Lamont in the Aug. 10 Democratic primary, presented his jobs program last week during a news conference June 15 at a state employment services center in Danbury.
His package called for, among other things, a "huge investment in research and development with the potential to generate 30,000 direct jobs and 75,000 spin-off jobs."
Former U.S. Rep. Jim Maloney (D-Danbury) has said the state should focus more on developing college curriculums that relate to high technology jobs than offer tax credits, since those might not have long-term benefit if another state makes a better offer.
State Rep. Robert Godfrey (D-Danbury), who has endorsed Mr. Malloy and attended the news conference last week, said in an interview that Western Connecticut State University (WCSU) in Danbury, for example, has aligned its curriculum with the area job market.
He said the science building that opened in 2005 on the midtown campus offers the best program of any of the four schools in the Connecticut State University system.
Mr. Godfrey, the deputy state House speaker, said the science program at WCSU is training students for the bio-tech and bio-med fields that Mr. Malloy has said will be growth engines over the coming years.
State Rep. Joe Taborsak (D-Danbury) and other area Democratic officials attended the news conference. After answering questions, Mr. Malloy toured the jobs center.
Regarding having a level playing field, Mr. Malloy said his experience as the mayor of Stamford taught him that cities on the New York state border have to be concerned about possible competition from municipalities in nearby Westchester County.
State Comptroller Nancy Wyman (D-Tolland), who is Mr. Malloy's running mate for lieutenant governor, said she recently spoke to someone whose son, she was told, worked for a company with 30 to 40 employees that moved operations from Connecticut to Mexico.
She said she was told that New York state officials contacted the company before the move was announced but "our state never came to them."
Mrs. Wyman, who has served as comptroller for 16 years, said Mr. Malloy proved during his 14 years as a mayor that he can retain businesses.
Mr. Malloy has said Stamford added nearly 5,000 jobs during his tenure.
Lt. Gov. Michael Fedele (R-Stamford), who is running in the primary for the GOP gubernatorial nomination, has said the state's film production tax credit helped attract Blue Sky Studios to Greenwich from New York state.
He has said the company employs many people with six-figure salaries.
Greenwich businesswoman Linda McMahon, the Republican convention nominee for the U.S. Senate, has said, for example, that ESPN in Bristol has benefited from the film production tax credit and is again expanding.
She is the former chief executive officer of WWE, the wrestling production company in Stamford.
On another topic, Mr. Malloy said Democratic President Barack Obama has raised "a good point" by calling in his State of the Union message last January for a doubling of exports over the next five years.
"We're an exporter of products and services," Mr. Malloy said in reference to Connecticut's economy.
The Hartford Courant has called Connecticut "an export-dependent state."
Mr. Malloy said he believes that the state can expand its sales of services, such as life insurance, and should also "go after manufacturing to a greater degree."
He said "scholars" are saying that the United State will undergo a "reindustrialization" in the coming years.
Mr. Malloy said he believes some of the state's green technology companies could expand their exports over the coming years.
He said he believes there "is real value" in a governor traveling on trade missions to foreign markets.
Mr. Fedele has gone on trade missions to Europe and China since becoming lieutenant governor in 2007.
Former Gov. William O'Neill (D-East Hampton) went on several trade missions in the 1980's.
Mr. Malloy repeated some of his central campaign themes, saying that only Connecticut and Michigan have fewer jobs now than they had in 1989.
Washington Post economics columnist Robert Samuelson wrote last week that the slow jobs recovery nationally is largely due to "psychology."
"Not since World War II has an economic recovery been so hobbled by poor confidence," he stated.
"Every recession leaves a legacy of anxiety and uncertainty," Mr. Samuelson added. "But the present residue is exceptional because the recession was savage and–more important–its origins (housing bubble, financial crisis) were unfamiliar."
For months, Mr. Malloy has said that companies in Connecticut have been stymied by electricity costs that are higher than in neighboring states following the deregulation of the industry in 1998.
Mr. Malloy has said he would sign the Democratic-sponsored electricity reform package that departing Gov. M. Jodi Rell (R-Brookfield) recently vetoed.
Among other things, that legislation reportedly would have reorganized the state Department of Public Utility Control and provided more incentives for homeowners to install solar technology.
In her veto message last month, Mrs. Rell stated that the legislation would result in higher utility costs for consumers.
A poll distributed recently by Quinnipiac University in Hamden indicated that Mr. Lamont held a 39 to 22 percent advantage over Mr. Malloy among the likely Democratic primary voters survey. The poll indicated that 36 percent of the Democrats surveyed are undecided in a primary that is still more than seven weeks away.
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