Jackson Lab debate pits costs against jobs

Though the potential for dramatic job growth in cutting-edge bioscience is supposedly the chief selling point for the proposed Jackson Laboratory research center, it’s the finances behind the deal–and two very different ways of presenting them–that is controlling much of the Capitol debate.

For nearly a month, Gov. Dannel P. Malloy’s administration has been touting two numbers: $291 million from the state and $809 million from Jackson Laboratory. Together, officials say, they represent the total money that will be spent on capital and operating costs at the proposed facility for the next two decades.

jackson lab finances

“For every $1 the state is spending on the project, Jackson Laboratory  will spend $3,” read a press release Malloy’s office issued on Sept. 30, when a tentative deal first was announced.

But another way to describe the same arrangement is that Connecticut will pay the entire construction cost of the Farmington laboratory and subsidize its research operations for the first decade. Jackson Laboratory’s contributions won’t exceed the state’s $291 million direct contribution until the 11th year — one year after Connecticut stops putting money into the facility. And neither of these comparison’s includes the $120 million in interest charges Connecticut will face to borrow $291 million.

“It was presented to create the appearance that Jackson Laboratory is making an investment in the building, and they’re not,” said Deputy House Minority Leader Vincent J. Candelora of North Branford, whose fellow Republicans have been increasingly critical of the Democratic governor’s push to bring Jackson Laboratory here.

Why were interest charges not highlighted in many of the comparisons with Jackson Laboratory’s contributions?

Malloy’s commissioner of economic and community development, Catherine Smith, noted during an interview Friday that the extra $120 million cost to Connecticut will go to its bond investors, not into the research facility. “We’ve never included the debt service” in describing state’s contribution to the project, she said.

Why juxtapose that $291 million–which Connecticut will spend in the first 10 years on construction costs for a 173,000-square-foot center and to supplement research operations–with 20 years of projected operating costs for Jackson Laboratory, specifically $809 million?

Based on a 20-year financial projection for the project, Jackson Laboratory’s total operating expenditures for the first decade–when the state is contributing–will fall between $279 million and $290 million.

While supporters said the goal was to contrast finances over the same period used to calculate job growth forecasts, critics again countered that political spin was at work. The interest costs are outlined in a project summary report distributed by the administration last week, but Candelora said the initial presentation did its work: Many legislators and news media already are referring to the proposal as a $1.1 billion initiative.

“You can’t have it one way and not the other,” Candelora said. “You can’t look at Jackson’s costs through a 20-year window and not talk about the interest at the same time. It’s disingenuous.”

But key Democratic legislators responded Monday that Candelora and his fellow Republicans are trying to shift the debate away from numbers that are particularly enticing for state government.

The administration estimates that partnering with an international leader in genetic research on will create over 7,400 jobs.

The Maine-based, not-for-profit research institute is required to have 300 direct jobs at the center by the 10th year, and is expected to create over 660 direct positions within 20 years.

But administration officials also estimate more than 4,000 bioscience jobs would be generated largely through spin-off companies, and another 2,000 would be added to local service and retail operations from increased economic activity. Lastly, the project would create more than 840 temporary construction jobs in the next few years.

Smith said the forecasts might be somewhat conservative. She noted that a 2009 analysis of the bioscience industry by PricewaterhouseCoopers, a global accounting and professional services firm, is projecting 11 percent annual growth for the foreseeable future. But the administration, in preparing job estimates, pulled back dramatically in the second decade, assuming a modest 4.5 percent annual jump.

“I am very confident about those numbers,” Smith said.

“I think what really motivates most people, including myself, is that Jackson Labs brings with it an international credibility,” added House Majority Leader J. Brendan Sharkey, D-Hamden. “We have an opportunity to really launch meaningful economic growth in this particular field.”

“If this debate was not focused on the much bigger picture, this could not happen,” said Sen. Gary D. LeBeau, D-East Hartford, co-chairman of the Commerce Committee, who said Republicans’ focus on contrasting public and private investments is short-sighted.

“It’s like we’re planting a tree in the woods and they’re asking ‘How much can I sell the lumber for if I chop it down in 20 years?'” he said. “What they should be asking is ‘How many seeds will that first tree produce and will we be looking at a grove in 20 years?'”

LeBeau quickly modified his analogy to note that with annual investments in stem cell research since 2006, top-flight research institutions like the University of Connecticut Health Center and Yale University, and one of the largest per capita scientific workforces of any state, Connecticut already has several seeds planted.

“I believe this is the only direction for us to go,” LeBeau added. “I really believe we have no choice but to do this.”