🔒Corporate subsidies can’t replace better business climate

Gov. Dannel P. Malloy's administration deserves credit for hatching the $220 million incentive package to keep Sikorsky Aircraft firmly implanted in Connecticut through at least 2032.

While we're apprehensive about the large incentives Malloy has doled out to businesses during his tenure, we understand the state's ability to grow jobs organically has been hampered by a lackluster business climate.

Executives from Sikorsky's parent Lockheed Martin, for example, said the company needed the incentives to offset approximately $400 million in extra costs to build its CH-53K helicopters in Connecticut rather than competing states.

Those numbers underscore the competitiveness issues Connecticut faces in maintaining and adding high-quality jobs.

But as we head into the Nov. 8 elections, voters must ask if corporate welfare as a chief economic development strategy is the answer to long-term job growth in Connecticut. Most would agree, particularly those in the business community, it is not. Connecticut's slow recovery from the Great Recession (we still haven't recovered all the 119,000 jobs lost from that period) offers some proof to that point.

While economic incentives have become commonplace across the country (remember, Boston and the state of Massachusetts offered General Electric as much as $145 million in tax breaks and grants to move its headquarters north from Fairfield), their use has been amplified in Connecticut under the Malloy administration.

In August, for example, Malloy released a report that showed his First Five economic development program has doled out $256 million to 13 corporations, which created 3,757 jobs and retained 13,349 others. Malloy said the numbers and return on investment show the program has been a success, although it doesn't take into account whether the companies would have made the capital improvements or added jobs even in the absence of government aid. Of course, many recipients claim they would be forced to move without public funds, but we can't verify if that's always true.

It's also nearly impossible to determine whether the state or companies receiving incentives negotiated the better deal. At the end of the day, taxpayers are left to trust that government bureaucrats weren't taken advantage of by corporate dealmakers.

To his credit, Malloy has helped secure major employers like Sikorsky and Pratt & Whitney with state-aid packages, but the mission would be easier — if not less costly and fairer — if Connecticut was a more attractive place to invest capital. That, of course, would require lowering the cost of doing business, reducing or streamlining regulations, adopting more fiscally sound budgets, among other efforts. Indeed, an economic development policy that puts so much emphasis on grants and loans to create and retain jobs gives the executive branch, which is subject to the whims of political pressures, significant power in choosing winners and losers.

We aren't saying Connecticut should take itself out of the corporate welfare game (to do so would ignore the competitive environment between states), but we need a more balanced policy strategy that relies less on government to seed job growth and preservation.

As the economy weighs heavily on voters' minds this election season, state legislative candidates should be asked to bare their strategy on how to promote economic growth with less help from government handouts.