It was a deal from another era under another governor, Dannel P. Malloy.

Governor Ned Lamont has already reduced the size and number of incentive agreements for businesses. Now he is moving toward an almost exclusive use of tax credits as Connecticut’s reward for business expansion, rather than loans and grants.

Instead of getting cash up front, companies would be eligible for credits over time under a new JobsCT program that offers a standard formula – not bespoke offers like those offered by Malloy – so that companies can benefit from incentives.

The Connecticut Department of Economic and Community Development has been awarding grants under the JobsCT label since last July, supported by funds already authorized under existing incentives. Lamont is now calling for a permanent JobsCT program — but shifting it to credits from future tax revenue, rather than grants backed by bonds that the state must repay with interest.

There was little dissent at a March hearing of the General Assembly’s Commerce Committee. Still, DECD Commissioner David Lehman was careful to explain the goals while noting incentives in other states that companies can tap into.

It’s the third year in a row Lehman has tried to sell the legislature on the program, which was shelved in 2020 and 2021 by the demands of the COVID-19 pandemic.

“I know there have been discussions in the legislature about whether there should be incentives for growing businesses,” Lehman told members of the commerce committee last month. “We have significantly reduced the number of incentives offered by the state. We don’t think you should lead by incentives – we realize that incentives are provided by the taxpayers of Connecticut. There is a really, really important balance.

Up to $5,000 per job

Employers who add at least 25 jobs can get tax refunds of 25% of the income tax withheld for that worker, capped at $5,000 for those in higher tax brackets. The bill would extend the rebate to 50% for businesses that hire in urban districts where the state seeks to promote growth.

Between 2012 and 2021, the DECD provided $1.34 billion in cash grants and loans to employers according to the DECD’s latest annual report, not including an additional $125 million in COVID-19 pandemic relief distributed to employers. businesses and non-profit organizations.

“Before the pandemic, the number of trade incentive bonds was nearly $200 million a year for the previous three years,” Lehman said, in an interview with Hearst Connecticut, referring to the past Malloy years. “We were down to about $50 million before the pandemic.”

DECD assistance is just one way to help businesses looking to grow in Connecticut. Others include helping with worker training through the Department of Labor and/or equity investments from the Connecticut Innovations venture capital fund.

Lehman said the state would remain open to one-time incentive deals with the approval of the legislature, for companies that would maintain large numbers of jobs — such as the case with Cigna in Bloomfield or Lockheed Martin’s Sikorsky subsidiary. in Stratford.

As part of a $200 million incentive package in 2016, Lockheed Martin pledged to retain Sikorsky’s headquarters plant in Stratford until 2032 as it builds a new fleet of helicopters for the US Marine Corps. At nearly $42 million, the DECD estimates the state has generated more than twice the tax revenue of the value of the incentives given to Sikorsky during this period as it ramps up construction of the helicopters.

Under a new deal earlier this year, Lockheed Martin can earn $50 million in tax credits and other incentives if it wins a big Pentagon contract to replace the Black Hawk helicopter, but with incentives directly tied to Sikorsky’s success in winning this bid.

With vast resources and prestige, Cigna and Lockheed Martin were able to fill the available jobs in Connecticut. But many companies struggle to find people to do the work at the salary they are willing to pay. Connecticut remains well below its 2019 employment totals, with some workers remaining on extended hiatus through spousal earnings, savings or other means.

“Since February 2020, 71,400 people have left Connecticut’s workforce,” said Chris DiPentima, CEO of the Connecticut Business & Industry Association, speaking Thursday at the AABC’s economic conference in Trumbull. “This represents 50% of the decrease in the New England workforce – but even more staggering, it represents 41% of the decrease in the national workforce. Little old Connecticut, with 1% of the national population.

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