Team Malloy certainly knows how to make headlines. From the $1.5 billion tax hike that was the largest in state history to a billion-dollar plan for bioscience, the administration gravitates to numbers designed to shock and awe.
They’ve done it again in unveiling plans for a quarter-billion-dollar labyrinth of programs designed to stimulate the growth of innovative companies here in the Land of Steady Habits.
Like most things in government, there’s a germ of an idea here that’s worth pursuing. Little guys with big ideas have been able to shop a smorgasbord of state incentives when deciding where to grow their business. Connecticut is late in getting into the game but that’s better than never.
And the framework put together suggests a lot of thought went in to how to marshal not a lot of money.
A quarter-billion sounds like a lot until you delve into the pesky details. That quarter-billion is spread across five years. Only half the money is new; the rest is from returns on previous investments by Connecticut Innovations. It includes a de facto second wave of ‘First Five’ incentives for big players, at $7 million a year.
So once we get down to the program specifics, we find:
• $4 million per year for CI’s pre-seed program, which offers loans to support the formation of new Connecticut technology companies;
• $22 million per year for seed stage and Series A investments, which help entrepreneurs grow existing businesses, and for follow-on investments in CI portfolio companies;
• $6.5 million per year for a newly developed loan program, which provides growth and working capital for technology companies;
• $4 million per year to help Connecticut companies capture more of the federal Small Business Innovation Research funds each year, as well as increase industry partnerships and the state’s technology talent pipeline;
• $4.8 million per year to establish a number of technology business accelerator hubs — likely three but the RFP leaves it open — which will provide support services to startups, and create a corporate technology transfer initiative.
Just let that final last item twist around in your mind for a minute as an example. That’s a lot of work for not much money.
And we haven’t even touched the question of what kind of apparatus will have to be set up to manage this set of programs.
We want to believe and conceptually this is a nice set of first steps. But we suspect Team Malloy is overpromising and will under-deliver on this one. Of course, that calculation likely won’t become clear until years down the road, say after the 2014 re-election campaign.
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First busway casualties
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Speaking of programs that are destined to underperform, the busway is back in the news.
Seems the first couple of contracts on the nine-mile commuter boondoggle have gone to Massachusetts contractors who plan to use nonunion labor, likely only some of whom have Connecticut addresses.
That has the Laborers District Council hopping mad and staging a rotating protest outside the Capitol.
The argument for the project only made sense from a job-creation perspective. But if the gravy train doesn’t board locals, the workers — union and nonunion — there’s a problem.
The real impact here is likely to be an energized labor movement pressing the Legislature for some way to tilt the playing field back in favor of the locals. One plan under discussion would impose a set of costly regulations on out-of-state firms in the guise of a contractor responsibility program. Another would allow a second round of bidding that would let Connecticut firms steal the job if they agreed to match the low bid.
Both plans are risky, but so is the status quo.
